It’s mostly due to how service-oriented (i.e. bullshit) our economy is. We’ve got a huge industry dedicated just to shuffling money around due to our lack of a reasonable health care system.
The rest of the West is also service economies, so it’s not that. The study says it’s mostly because the US is huge, and can just trade with itself most of the time, which is the established wisdom
“A low trade-to-GDP ratio may also arise from the fact that a country is large, wealthy and developed, with a diversified economy that can provide most of the goods and services it needs domestically. We think this explains a lot about the U.S.’s extremely low ratio.”
A point the authors don’t seem to include is the money the USA spends on defense, which is largely used to ensure the ability of global trade to continue unimpeded. The USA is essentially exporting global stability for trade to occur (sometimes with dire consequences of local populations).
can provide most of the goods and services it needs domestically.
Things nearly collapsed when Long Beach and Los Angeles docks were bottlenecked. The US doesn’t produce anything to keep things running.
The US produces a ton of high-tech stuff, and services like architecture or software. It produces a bit of intermediate goods like metal or chemicals, enough to break even. It doesn’t produce much in the way of low-end consumer goods. It could start cranking out bowls if the docks were gone for good, but Americans would be outraged because they’re used to paying $1 instead of $10 for something like that.
In the past oil was also a huge bottleneck, but America has fracked it’s way back to net exporting now. And has tons of refineries, that’s where all the Canadian crude goes.
That’s because the US laid the groundwork to have US corporations exploit cheap foreign labor, but now that those countries are making their own things, the US isn’t able to steal the profits from those.
