The big losers in the trade war
The big losers are likely to be the biggest beneficiaries of globalisation — American multinationals.
As barriers to trade and capital fell in recent decades, US corporations increased profits much faster abroad than at home. Profit margins for S&P 500 companies had held steady since the 1960s.
Then margins nearly doubled to around 13 per cent after 2000, coinciding with China’s entry into the WTO.
Many US giants generated “supernormal” profits, far higher than their developed world rivals, by cashing in on the appeal of American brands and outsourcing production to nations with the cheapest costs.
Today, US multinationals generate more than 40 per cent of their revenue abroad.
The biggest gainers were manufacturers, which on average pay their workers overseas 60 per cent less than staff at home.
Amid anger over tariffs, “Made in America” is attracting more controversy than customers.
Two in three Germans say they are avoiding US products.
This decade so far, the US has attracted 80 per cent of the money flowing into stock markets worldwide, but those flows are starting to shift.
Institutional investors around the world are aggressively paring back their US exposure.
Ruchir Sharma Financial Times 21 April 2025
https://www.ft.com/content/e4394db2-1678-4179-9b1a-6f384b8c43ea
US Discretionary spending is becoming a luxury for the wealthy, and so is optimism
Ruchir Sharma FT 4 November 2024
https://englundmacro.blogspot.com/2024/11/us-discretionary-spending-is-becoming.html
USA: The Haves and Have-Nots
https://englundmacro.blogspot.com/2024/07/usa-haves-and-have-nots.html
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