Another means by which an intensification of financial turmoil in Europe could affect U.S. growth is by reducing trade. Collectively, Europe represents one of our most important trading partners and accounts for about one-quarter of U.S. merchandise exports.
Accordingly, a moderate economic slowdown across Europe would cause U.S. export growth  1  See Federal Financial Institutions Examination Council, “E.16 Country Exposure Lending Survey and Country Exposure Information Report.”  BIS Review 70/2010  3  to fall, weighing on U.S. economic performance by a discernible, but modest extent.