US President Joe Biden’s program to stimulate the US economy will also provide significant support to the country’s trading partners. China will benefit most from it. This is the conclusion reached by the international insurance company Euler Hermes.
Total spending under the program is expected to reach $1.9 trillion over the next two years. In particular, experts expect that 360 billion will eventually go to increase imports of goods and services since the US manufacturing sector will not have time to meet the sharply increased demand.
Of these, 60 billion will be a “gift” for China. After him, Mexico will benefit the most-plus $45 billion in exports. Germany will receive an additional $22 billion, and the United Kingdom — $16 billion.
If you look at the growth in export revenues relative to GDP, then the Biden initiative will benefit most from Mexico (plus 1.7 percent of GDP), Vietnam (1.4 percent), and Ireland (1.3 percent). Before the stimulus program, China’s export growth to the United States was estimated at $115 billion in two years, and with it — $175 billion. Mexico has 87 and 132 billion, while Canada has 73 and 121 billion.
By sector, the manufacturers of household appliances (an increase of $32 billion), computers and telecommunications equipment ($30 billion), and the automotive sector ($30 billion) will feel the best.
The company estimates that the US trade deficit will grow to 4.5 percent of the country’s GDP in 2021 and 2022, although in the past five years it was about 2.9 percent. An additional reason for this assessment was the revision of GDP growth.
Euler Hermes estimates that the U.S. economy will grow by 5.3 percent in 2021 and 3.8 percent in 2022. Back in December, growth was expected to be only 3.6 and 3.1 percent, respectively. This change means that households will start spending the savings accumulated during the crisis faster. At the same time, the estimate looks quite modest — Goldman Sachs expects GDP growth of eight percent at once.