America matters more

The header of a Bloomberg article runs as follows:

If Trump Hits China, Regional Demand Would Soften Blow in Asia [Link]

I think that is a bit of a stretch. Surely, China has become important to Asian economies and other emerging economies but the U.S. matters much more. Without the U.S., the world economy would not be the same. Important for the so-called Pundits to shed that delusion or illusion too. Not that they have a good record on that.

You do not have to believe me but just peruse the BIS Annual Report 2016 (Chapter 3 – page 56):

In contrast to the significant rise in exports destined for China, the share of
most countries’ exports to the United States has remained stable or declined a little
over the past 15 years (Graph III.6, bottom panel). Despite this, US demand is still
more important than China’s for most countries’ exports.[Emphasis mine]

Trade spillovers can also occur through a third country that imports intermediate
inputs used in the production of its own exports. As a result, for many advanced
and commodity-exporting EMEs the indirect impact of a reduction in US imports is
large relative to the direct effect (the blue bars are large relative to the red bars in
the bottom panel of Graph III.6). Spillovers from other major advanced economies
also remain important for both advanced and emerging market economies. [Link]

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