United States: Stimulus plan paves the way for record trade deficit
As the world's largest importer, and second largest exporter of manufactured goods, the United States has had a trade deficit since the early 1970s. Escalating trade tensions - in particular with China - and the COVID-19 pandemic, which disrupted trade flows have affected the trade balance in recent year. The trade deficit has reached a record level of over 900 billion USD in 2020.
In its latest economic analysis, Coface predicts that after a 3.5% contraction in 2020, US GDP will rebound by 5.7% this year, which would allow the US economy to return to its pre-crisis level as early as mid-2021, ahead of most advanced economies. As President Joe Biden reaches the half-way mark of his first 100 days in office, this powerful rebound in the US economy is partly driven by the unprecedented fiscal response to the crisis. The support package adopted in March 2021 amounts to 1.9 trillion USD, and will bring the total fiscal response to the crisis to an amount equivalent to 27% of US GDP, more than any other mature economy. Using an analysis based on historical estimates of a potential trade balance, Coface estimates that the deficit could grow by 56 billion dollars as a result of the stimulus plan.
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