Fun
Facts. "The Whys."
Friday, April 4, 2025.
The US economy is huge and complex. As the stock markets
roil after President Trump pushed the nuclear tariff button, here are some fun facts
to take your mind off your 401k or toss around at your next cocktail party.
Just facts. Data for Russia is shown as it will be important for future
discussion.
COVID-19
and 2020.
Few years have been as consequential as 2020. Everything,
including the economy, is still in recovery mode.
January 1, 2020: Wuhan
seafood market closed.
January 16: First Trump
impeachment trial starts.
January 20: CDC reports
first US case of COVID-19.
March 17-28: COVID
lockdowns begin.
April 16: Trump issues plan
for states to reopen.
May 19: US unemployment
rate hits 14.7%.
May 25: George Floyd dies
while being arrested.
September 18: Supreme Court
Justice Ruth Bader Ginsberg dies.
September 22: US COVID
death toll passes 200,000.
October 2: Trump tests positive for COVID.
November 3: Biden defeats
Trump.
November 4: CDC reports
100,000 daily new case rate for COVID.
December 10: Pfizer COVID vaccine
approved; effectiveness is 95%.
January 20, 2021: Biden inauguration.
The market.
US stocks have shown powerful performance since the Great
Recession of 2008. Here is a look at the value of the benchmark S&P 500 since
then. S&P value is shown for the date each president left office, followed
by the change in value during their term. Trump data, of course, is to date.
Obama: 2,263. +181%.
Trump 1: 3,799. +67%.
Biden: 5,252. +36%.
Trump 2: 5,074. -16% (11
weeks).
GDP by country.
Data for 2024 show the US has the
largest Gross Domestic Product in the world by a long shot and was still
growing. Data shown is GDP and one year growth, 2023-2024.
US: $29 trillion, $1.4
trillion.
China: $18 trillion, $550 billion.
Germany: $4.7 trillion,
$187 billion.
Canada: $2.2 trillion, $72
billion (rank 10).
Russia: $2.1 trillion, $175
billion (rank 11).
The US has had positive GDP growth
in every year for the last 30 years except for the 2009 global recession and
the 2020 pandemic. In 2021 US GDP grew 5.8%.
Per capita GDP.
The US economy is productive on a
per capita basis. Here is how countries ranked using 2023 data, the latest available.
Luxembourg 1.
Switzerland 2.
US 7.
Macao 8.
Hong Kong 20.
Macao and Hong Kong are Special
Administrative Regions of China. China proper and Russia were far below top 20
countries.
Export
nations.
China is the world’s largest
export nation. The US still exports a lot.
China: $3.4 trillion.
US: $2 trillion.
Germany: $1.6 trillion.
Everywhere else: <$1 trillion.
Russia: Not in top 12.
Trade deficits.
No surprise, the US has run a
trade deficit for decades. For a good summary, check out the link in the notes
to the WSJ’s “What to know about the US trade deficit in charts,” which also
has a good explanation of the unique method Trump used to calculate tariffs.
Here are the top US trade
deficits for 2024 in billions.
China:
-$270.
Mexico:
-$157.
Vietnam:
-$113.
Ireland:
-$80.
Canada:
-$55 (9th).
Why did Trump do it?
And therein lie Trump’s
tariff beefs, which are mostly not about tariffs.
When Trump accuses countries
of placing high tariffs on the US, he doesn’t use tariff by its literal
definition--a direct tax on goods. Instead, he measures tariffs by whatever the
US trade deficit is with a given country and includes the items below.
Tariffs.
Non-tarrif trade barriers.
Back-door imports.
Currency manipulation.
“Non-tariff
barriers are trade barriers that restrict the import or export of
goods through means other than tariffs. The World Trade Organization (WTO)
identifies various non-tariff barriers to trade, including import licensing,
pre-shipment inspections, rules of origin, custom delayers,” according to the Corporate Finance Institute.
Back-door imports are when countries like China relocate factories to
countries with lower tariffs and import barriers to the US compared to imports
direct from China. Mexico, Vietnam, and Cambodia are China’s favorites. Back-door
imports through Mexico enjoy the additional benefit of “near-shoring,” or
reduced shipping costs.
Currency manipulation. In his first term, Trump targeted countries he felt
were manipulating their currencies, including China, Germany, and South Korea. Vietnam
and Cambodia are also accused.
Who got whacked?
That explains who got whacked
the hardest. Just look at the list of countries that top the US trade deficit
chart.
Vietnam and Cambodia got hit with 46% and 49% tariffs respectively. Both
countries quickly signaled they would lower tariffs, but both already have low
tariffs. The larger issue is their alleged currency manipulation and non-tariff
trade barriers. They are also among China’s favorite countries for back-door
imports to the US, although Mexico tops that list.
China got hit with 34% tariffs on direct imports. That was
on top of two 10% tariffs Trump had already imposed since January. Total US
tariffs on China are now 54%. China quickly announced retaliatory tariffs of 34%
on the US.
Mexico was spared in this round of tariffs, although a 25%
tariff previously levied on autos, steel, and aluminum still stands. Mexico may
have been shielded because of the USMCA trade agreement, US, Mexico, Canada,
which Trump negotiated in his first term.
Ireland is part of the EU, which only got hit with 20%
tariffs. But Trump has his eye on them because their low corporate tax rate has
lured many companies to establish headquarters there. About half of US
pharmaceutical imports are from Irish companies.
What happens next?
The facts are not yet known.
Opinion. Trump believes he
can negotiate new deals with each of the countries he claims are treating the
US unfairly. That is very Trumpian.
In Trump’s transactional
world view, he holds the cards in this global trade game. The enormous US
economy, see above, gives him a giant pile of chips. Trump is all in. So are
we.
You’ve probably heard
references this week to the last time the US imposed large tariffs. The
Smoot-Hawley Act was passed in 1930, as the country was entering a depression.
It imposed 25% tariffs on imports intending to protect US farmers and
businesses. Instead, it kicked off a global trade war that is credited with pushing the US into what became known as the Great Depression.
Notes.
https://nashuproar.org/39777/features/the-14-most-important-events-of-2020/
https://www.cdc.gov/museum/timeline/covid19.html
https://www.investopedia.com/timeline-of-stock-market-crashes-5217820
https://darrowwealthmanagement.com/blog/stock-market-performance-by-president-in-charts/
https://finance.yahoo.com/quote/%5EGSPC/history/
https://www.statista.com/statistics/270180/countries-with-the-largest-gross-domestic-product-gdp-per-capita/
https://www.statista.com/statistics/264623/leading-export-countries-worldwide/
https://www.reuters.com/markets/us/us-trade-deficit-narrows-february-2025-04-03/
https://www.wsj.com/economy/trade/what-to-know-about-the-u-s-trade-imbalance-in-charts-79b25c0b
https://www.nytimes.com/2025/02/05/business/economy/us-trade-deficit-2024-record.html
https://worldpopulationreview.com/country-rankings/us-trade-deficit-by-country
https://www.cnn.com/2025/04/03/business/trumps-reciprocal-tariffs-countries-list-dg/index.html
https://www.nytimes.com/2025/04/04/business/trump-china-tariffs.html
https://corporatefinanceinstitute.com/resources/economics/non-tariff-barriers/
https://www.theguardian.com/us-news/2025/apr/04/china-donald-trump-tariffs-recession--us-stock-market
https://www.euronews.com/business/2025/04/04/mexico-rejoices-dodging-new-us-tariffs-but-still-hit-by-economic-woes
https://www.nytimes.com/2019/05/23/us/politics/trump-currency-manipulators.html
https://apnews.com/article/trump-tariffs-democrats-economy-protests-financial-markets-90afa4079acbde1deb223adf070c1e98
https://www.bbc.com/news/videos/cx2g1dwk27do
https://www.theguardian.com/world/2025/mar/12/donald-trump-ireland-micheal-martin-white-house-meeting