It’s obvious to anyone that a financial crisis in Europe would be bad for the American economy. However, most of the coverage surrounds the difficulties for U.S. banks and other holders of European debt. A new chart from the San Francisco Fed helps refocus the concern towards the broader economy.
A whopping 22% of U.S. exports go to Europe, which is even more than we send to Canada. If Europeans become suddenly unable to buy American goods because the Euro’s value plummets, our domestic economy could take a significant hit.