- Matthias Diermeier / Michael Hüther / Markos Jung ·
- IW-Kurzbericht No. 33 ·
- 11 Jun 2018
It’s business models, stupid!
In contrast to a massive current account deficit against China, the US runs a current account surplus with respect to the European Union. The US-EU surplus is largely driven by a positive service balance and primary incomes originating from US investments abroad. Services and primary incomes overcompensate the US goods trade deficit with the EU. Rather than representing a “rip–off”, the different balances reflect the economies’ different business models.