Attempts by Washington to “flood” the pandemic with trillions of dollars were unsuccessful. The money has been wasted, but the coronavirus is spreading in the United States with renewed vigor. However, it is not just Americans that will suffer from such trends.
This is reported by “Reuters”.
To date, 3.8 million people have been diagnosed with coronavirus infection in the United States. More than 140 thousand died. It was not possible to curb the virus even thanks to the $3 trillion that the authorities allocated in April and May. Now the daily growth of the disease has tripled and exceeds 70 thousand cases.
“The risk is that a significant portion of the US population will face severe deterioration in living standards and significant economic hardship over several years. This, in turn, could further weaken demand and exacerbate long-term impediments to growth”, – the IMF predicted further trends.
However, as noted in Reuters, the coronavirus in the United States is becoming a kind of trade sanctions for many countries supplying their products to the American market. The problems facing the Americans are cutting consumer spending and, as a result, leading to a reduction in imports. It has already dropped 13% since the beginning of 2020. This is equivalent to $176 billion.
In this regard, Germany’s exports to the United States plunged 36% over the same period last year. Analysts see little chance of improvement, with US car sales falling nearly 24% year-to-date from last year.
A similar situation overtook Japan. As noted by Hideo Kumano, a former Bank of Japan employee who is currently chief economist at the Dai-ichi Life Research Institute, the recovery of the Japanese economy will depend on the success of the United States.
“Japan’s recovery will indeed be delayed unless the spread of the coronavirus in the United States is halted and US exports from various Asian countries are not increased”, – said Hideo Kumano.
According to the forecasts of the International Monetary Fund, American GDP will contract by 6.6% in 2020. Even more pessimistic is the Bank of Canada, which estimated the collapse of the US economy at 8.1%. Such prospects will be especially negative for Canada, given that three quarters of the country’s exports go to the United States.