Here in Germany there is a strange perception of external trade and how it is influenced by a falling dollar. This is today’s Handelsblatt:
Die Bundesbank betont dagegen, dass 2006 schon 81 Prozent der deutschen Exporte in Euro abgerechnet werden, 2002 waren es 71 Prozent. Außerdem habe die deutsche Wirtschaft inzwischen ihre Wettbewerbsfähigkeit gegenüber dem Ausland „merklich verbessern“ können, heißt es in einer dem Handelsblatt vorliegenden Studie der Deutschen Industriebank (IKB).
What is wrong with this? Well, it is true that German exports are mainly going to countries where people pay with euros. However, this fact does not support the argument that German exports will therefore be affected less by a falling dollar. US products will be cheaper in all Eurozone countries, and it doesn’t matter if the invoice says euros or dollars: a falling dollar will enhance US competitiveness in markets worldwide. That is globalization at work. Only trade barriers would protect German goods and services, but borders between the EU and the US are very, very open for the industries most affected.
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