Markets
Visualizing the World’s Largest Importers in 2017
Visualizing the World’s Largest Importers in 2017
For most world leaders and corporate executives, the swing of the global pendulum to more protectionist policies has been an unpleasant surprise.
That’s because the consensus view from both economists and economic historians has been that measures like the Smoot-Hawley Tariff Act of 1930, which triggered a trade war during the Great Depression, greatly exacerbated circumstances that were already quite dire.
It’s common for tariff increases to be countered by retaliatory measures, and this can often translate to lower levels of international trade and decreased economic growth across the board. During the period of 1929 to 1934, according to the U.S. State Department, world trade decreased by 66% – largely a result of subsequent trade wars after the passing of Smoot-Hawley.
For the above reasons, international barriers to trade have been falling for decades – until now, of course.
Largest Importers
Which countries can throw their weight around the most with tariffs and retaliatory measures?
It’s those that import the most goods – and today’s infographic from HowMuch.net shows the world’s largest importers in 2017, according to recently released data from the World Trade Organization.
Here are the top 15 largest importers, globally:
| Rank | Country | Imports ($B) | % of Global Imports |
|---|---|---|---|
| #1 | USA | $2,409 billion | 13.4% |
| #2 | China | $1,842 billion | 10.2% |
| #3 | Germany | $1,167 billion | 6.5% |
| #4 | Japan | $672 billion | 3.7% |
| #5 | United Kingdom | $644 billion | 3.6% |
| #6 | France | $625 billion | 3.5% |
| #7 | Hong Kong (China) | $590 billion | 3.3% |
| #8 | Netherlands | $574 billion | 3.2% |
| #9 | South Korea | $478 billion | 2.7% |
| #10 | Italy | $453 billion | 2.5% |
| #11 | India | $447 billion | 2.5% |
| #12 | Canada | $442 billion | 2.5% |
| #13 | Mexico | $432 billion | 2.4% |
| #14 | Belgium | $403 billion | 2.2% |
| #15 | Spain | $351 billion | 1.9% |
The United States takes home the number one spot with $2,409 billion of imports in 2017, about 13.4% of the global total. It’s worth mentioning that this is $860 billion higher than the country’s exports in 2017, and that the difference between the two numbers is the hotly-debated trade deficit.
China and Germany come in the #2 and #3 spots respectively, with $1,842 billion (10.2% of global total) of imports for China and $1,167 billion (6.5% of total) for Europe’s largest economy.
After the big three, no other country has a number exceeding 5% of global imports, but Japan, the United Kingdom, France, Hong Kong (China), and the Netherlands all surpass the 3% mark.
Markets
3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Valuations are much lower than they were during the dot-com bubble, but what else sets the current AI enthusiasm apart?
3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Artificial intelligence, like the internet during the dot-com bubble, is getting a lot of attention these days. In the second quarter of 2023, 177 S&P 500 companies mentioned “AI” during their earnings call, nearly triple the five-year average.
Not only that, companies that mentioned “AI” saw their stock price rise 13.3% from December 2022 to September 2023, compared to 1.5% for those that didn’t.
In this graphic from New York Life Investments, we look at current market conditions to find out if AI could be the next dot-com bubble.
Comparing the Dot-Com Bubble to Today
In the late 1990s, frenzied optimism for internet-related stocks led to a rapid rise in valuations and an eventual market crash in the early 2000s. By the time the market hit rock bottom, the tech-heavy Nasdaq 100 Index had dropped 82% from its peak.
The growing enthusiasm for AI has some concerned that it could be the next dot-com bubble. But here are three reasons that the current environment is different.
1. Valuations Are Lower
Stock valuations are much lower than they were at the peak of the dot-com bubble. For example, the forward price-to-earnings ratio of the Nasdaq 100 is significantly lower than it was in 2000.
| Date | Forward P/E Ratio |
|---|---|
| March 2000 | 60.1x |
| November 2023 | 26.4x |
Lower valuations are an indication that investors are putting more emphasis on earnings and stocks are less at risk of being overvalued.
2. Investors Are More Hesitant
During the dot-com bubble, flows to equity funds increased by 76% from 1999 to 2000.
| Year | Combined ETF and Mutual Fund Flows to Equity Funds |
|---|---|
| 1997 | $231B |
| 1998 | $163B |
| 1999 | $200B |
| 2000 | $352B |
| 2001 | $63B |
| 2002 | $14B |
Source: Investment Company Institute
In contrast, equity fund flows have been negative in 2022 and 2023.
| Year | Combined ETF and Mutual Fund Flows to Equity Funds |
|---|---|
| 2021 | $295B |
| 2022 | -$54B |
| 2023* | -$137B |
Source: Investment Company Institute
*2023 data is from January to September.
Based on fund flows, investors appear hesitant of stocks, rather than overly exuberant.
3. Companies Are More Established
Leading up to the internet bubble, the number of technology IPOs increased substantially.
| Year | Number of Technology IPOs | Median Age |
|---|---|---|
| 1997 | 174 | 8 |
| 1998 | 113 | 7 |
| 1999 | 370 | 4 |
| 2000 | 261 | 5 |
| 2001 | 24 | 9 |
| 2002 | 20 | 9 |
Many of these companies were relatively new and, at the peak of the bubble in 2000, only 14% of them were profitable.
In recent years, there have been far fewer tech IPOs as companies wait for more positive market conditions. And those that have gone public, the median age is much higher.
| Year | Number of Technology IPOs | Median Age |
|---|---|---|
| 2020 | 48 | 12 |
| 2021 | 126 | 12 |
| 2022 | 6 | 15 |
Ultimately, many of the companies benefitting from AI are established companies that are already publicly traded. New, unproven companies are much less common in public markets.
Navigating Modern Tech Amid Dot-Com Bubble Worries
Valuations, equity flows, and the shortage of tech IPOs all suggest that AI isn’t shaping up to be the next dot-com bubble.
However, risk is still present in the market. For instance, only 33% of tech companies that went public in 2022 were profitable. Investors can help manage their risk by keeping a diversified portfolio rather than choosing individual stocks.
Explore more insights from New York Life Investments.
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