Canada Now Trumps US On Top Economies List

By Ben Hamill - July 01 2020
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Canada Now Trumps US On Top Economies List

So brightly burning a trash fire has Trump’s US trade war with China become that small (but certainly forceful) countries are for the first time ever sticking it to the US’ reputation as the world’s most competitive economy. The most recent IMD ranking for the first time since 1989 places Canada ahead of the US. Canada now ranks at the number 8 position – a massive improvement when compared to last year’s number 13 position. The US has in the meantime digressed 7 positions in the last year, and now comes in at a lowly number 10 on the Swiss business school’s list of top economic performers.

Especially notable is that the majority of countries now dominating the top 10 list are comparatively small economies. And that the latest ranking has had a great deal less to do with penny-pinching and national money management than with the US-China trade war.

Trump’s America is its own worst enemy – the author of its own demise.

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The Benefits Of Being ‘Small’

Transparency, so opines IMB finance professor Arturo Bris, along with a liberal and relatively open welfare state, is at the root of why smaller countries are emerging as being better capable of dealing with the economic effects of a global health crisis than their historically financially more powerful counterparts.

Several factors appear to be at work, not excluding the fact that smaller economies are finding benefiting from economic competitiveness a much “easier reached” social consensus. National government leadership appears to be a smoother flow when talking up-and-coming economies than, say, global economic leaders already established as big-money producers.

In short: the ability to agree and work together in national unity far outweighs the benefits of a fat national purse administrated by those at constant political loggerheads. ‘Divide and conquer’ tends to come to mind.

Bigger Not Always Better

The US-China trade war has proved exceptionally effective at hurting both sides; politically as well as economically. Trump’s capricious nature has become an ever-present thorn in the side of the Chinese government – a government more than prepared to wait until after the November-elections before committing to any remedial deals. And the effects have been hammering to both sides.

The retail sales industry toward the end of last year appeared tenacious in its ability to remain strong in the face of economically damning conditions, but right now, it’s an entirely different kettle of fish. And it’s good news all the way for countries like Canada and Switzerland.

Proof again that size really does matter. Just not in the way initially assumed.

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