The dependence of U.S. exports on the current health of foreign economies is underscored by recent trade data. Economist Mitchell Held of Smith Barney, Harris Upham & Co. notes that though exports to Western Europe are down in the latest three months from the same period a year ago, exports to Britain are up a startling 17%. Calculated on a similar basis, U.S. exports to Canada and Australia are running 7.3% and 16.6% over last year, while exports to the NICs are up about 10% and to China, 41%.
What these destinations have in common, of course, is economies that are expanding. Canada, Britain, and Australia are on the recovery trail, while the NICs and China are still posting strong growth.
The biggest cloud on the economic horizon, says Held, is Mexico, where the economy has slowed significantly. After rising handily through much of last year, U.S. exports to Mexico have been declining since the third quarter.