Open secret: The USA benefits massively from its internal market compared to the EU with Germany

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Published on: September 9, 2025 / Updated on: September 9, 2025 – Author: Konrad Wolfenstein

Open secret: The USA benefits massively from its internal market compared to the EU with Germany – Image: Xpert.Digital

The open secret: Why America's economy is always one step ahead of the EU and Germany

### USA vs. EU: The simple reason why a trade war hits Germany harder than America ### Collapse of a successful model? Why Germany's export strategy is reaching its limits ### America's hidden superpower: Why the US economy is more crisis-proof than almost any other ### Germany's Achilles heel: The painful truth about our dependence on exports ###

450 million vs. 335 million consumers: Why the EU single market still can't keep up with the US

It's one of the best-kept secrets of the global economy: The true superpower of the United States lies not in its global trade presence, but in the exact opposite—in its impressive independence from it. While Germany is celebrated as the world's export champion and its economy is inextricably intertwined with global trade and the EU single market, the United States draws its strength from a massive, largely self-sufficient domestic market.

The figures reveal a fundamental divide shaping the fate of both economies: In the US, consumer spending drives the economy with a record 68.8% of gross domestic product (GDP). In Germany, this figure is just 49.9%. This discrepancy is more than just a statistic; it lies at the core of American resilience and German fragility. At first glance, the EU single market, with its 450 million consumers, appears to offer Germany a similar advantage. However, fragmented legal systems, cultural barriers, and the lack of a true fiscal union create hurdles that do not exist in the homogeneous American market. In times of global crises and trade conflicts, this structural difference becomes a decisive question for the future: While the US can rely on the stability of its domestic consumption, Germany's dependence on exports is increasingly becoming its Achilles heel.

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USA vs. Germany: Domestic market focus and trade dependence in comparison

The United States is one of the least trade-oriented economies in the world and benefits significantly from its vast domestic market. With a trade ratio of just 27% of GDP, the World Bank ranks it among the worst performers globally—only Nigeria (26%) and Sudan (3%) have lower figures.

This statement means: A low trade ratio, in turn, indicates high domestic consumption. A low trade ratio is a strong indicator of high domestic consumption or a domestic orientation of the economy, especially in large and largely self-sufficient domestic markets like the USA.

What is the trading quota?

The trade ratio refers to the share of foreign trade (the sum of exports and imports) in a country's gross domestic product. A low ratio indicates a strong domestic orientation of the economy, while a high ratio is often typical of small, open, and export-oriented economies.

Why is this good for the USA?

The United States benefits significantly from its vast domestic market: With over 330 million inhabitants, many American companies can sell large quantities without having to trade internationally. The domestic market offers sales opportunities, economies of scale, and protection against international shocks.
A low trade ratio makes the US economy less vulnerable to global trade conflicts, export fluctuations, and global crises. Even in the event of trade barriers or tariffs, domestic consumption can absorb a large portion of economic output.
Unlike export-oriented countries like Germany or South Korea, the United States is less dependent on open markets and stable global supply chains. This is a strategic advantage in a conflict-ridden or protectionist environment.

Classification in international comparison

Trade-oriented countries like Germany and Luxembourg have a trade ratio of over 80%. They are highly dependent on exports and imports and are therefore more vulnerable to global trade disruptions.
Countries with low trade shares, such as the USA, Nigeria, and Sudan, either have large domestic economies (USA) or, in the case of Nigeria/Sudan, have weakly developed economies and low integration into global markets.

The United States' low trade orientation is an expression of economic strength and independence because the huge domestic market offers many opportunities for growth and consumption on its own – a strategic advantage in an increasingly fragmented global economy.

American domestic consumption clearly dominates the economy

Private consumption: 68.8% of GDP (highest since records began in 1947)
Budget spending: $18.8 trillion – the largest single item worldwide
Domestic demand contributes over 90% to economic growth

This domestic market dominance provides the United States with significant economic advantages: The vast domestic market of 335 million consumers with high purchasing power enables economies of scale, reduces dependence on volatile global markets, and provides protection against external shocks. Studies show that international trade increases US GDP by only 2-8%—a relatively small percentage compared to other industrialized nations.

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Germany: Massive dependence on the EU internal market

Germany is the opposite of the USA. As an export-oriented economy with a trade ratio of 100% of GDP, Germany is one of the most trade-dependent nations in the world. This extreme outward orientation is evident in several dimensions:

EU internal market as a lifeline

58.5% of all German exports go to EU countries
66% of all German imports come from the EU
Around two-thirds of all German foreign trade is conducted within the EU internal market
Germany is the largest exporter within the EU with over 20% of all intra-EU trade flows

Structural trade dependence

Private consumption only 49.9% of GDP – well below the US level
Exports contributed 1.8 percentage points to GDP growth annually between 2000 and 2015
After 2015, this contribution fell to only 0.8 percentage points

The EU Single Market vs. the US Single Market: Structural Differences

The EU internal market theoretically offers Germany similar advantages as the US internal market

450 million consumers (compared to 335 million in the US)
GDP of 15 trillion euros – comparable to China, slightly below the USA
25% of EU GDP comes from intra-community trade

However, there are fundamental differences

Monetary union, but no fiscal union: Germany cannot benefit from automatic transfer payments like those between US states
Different languages, legal systems, cultures: Higher transaction costs than in the homogeneous US market
Political fragmentation: 27 different governments versus one central US government
Regulatory complexity: Despite harmonization, national differences remain

American resilience vs. German fragility

The USA benefits structurally more from its domestic market:

Crisis resilience: When the US imposed tariffs on EU goods in 2025, German exports to the US fell by 7.7%, reaching their lowest level since March 2022. The US economy remained largely unaffected, as the domestic market compensated.
Trade balance dynamics: The US runs a structural trade deficit of $78.3 billion (July 2025), which paradoxically reflects its domestic market strength – it can “afford” massive imports because domestic demand is so strong.
Growth independence: While Germany suffers from weakening global trade (export performance decline of 6.9% between 2015 and 2024), the US economy can rely on its robust domestic consumption.

German vulnerability becomes visible

Germany’s dependence on the EU internal market is increasingly showing weaknesses:

Export erosion: Germany is losing market share in 131 of 193 importing countries. Particularly problematic are losses in traditional strengths such as automotive, mechanical engineering, and chemicals.
Structural problems: After 2019, exports contributed only 0.3 percentage points annually to GDP growth – a collapse of the German growth model.
EU internal market limits: Despite the theoretical size of the EU internal market, Germany cannot achieve the same diversification and resilience as the US in its homogeneous internal market.

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USA has the structural advantage

The US benefits significantly more from its domestic market than Germany does from the EU's. The American domestic market, due to its size, homogeneity, and institutional unity, offers a more stable basis for economic growth. Domestic consumption, at 68.8% versus 49.9%, demonstrates the fundamentally different orientation.

Despite the EU single market, Germany is structurally more fragile, as Europe's fragmented economy does not offer the same economies of scale and crisis resilience as the integrated US market. The current export crisis demonstrates that Germany cannot fully compensate for its foreign trade dependence through EU integration, while the US benefits from its dominance of the single market.

The trade wars of 2025 illustrate this difference: While German exporters suffer from US tariffs, the American economy remains largely stable thanks to its strong domestic consumption.

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