Export Markets Fade as Trade Balance Sinks Under Dollar's Weight

Описание: Of course, trade imbalances have become one of the more persistent structural headwinds facing U.S. growth. A strong U.S. dollar, especially post-2020, has steadily eroded the export share of GDP.

When the dollar appreciates in real terms, U.S. goods become less competitive globally, and the effect ripples through manufacturing, pricing and supply chain dynamics.

Since the Fed started tightening a few years ago, the dollar's strength has accelerated, coinciding with a clear deterioration in net exports.

That’s not just a textbook currency-pass-through effect — it’s a direct drag on domestic production, employment in tradables, and overall resilience. In the long run, a persistent trade deficit like this a signal that external demand is slipping even as domestic costs rise.

With global demand already soft, the U.S. can’t rely on exports to cushion weakness at home. That makes the economy far more exposed to domestic shocks, especially if the dollar remains strong.