Bernd
07/13/2019 (Sat) 01:50:11
No.27984
del
Trade
Germany had naturally high imports. Though strong in manufacturing (the basis of its export sector), on the raw materials side its only plentiful resource was coal. Cotton and wool for the textile industries, coffee and food for consumption, oil for fuel, rubber for automobiles, iron ore for the steel industry and other commodities all had to be brought from abroad. There could be no production and consumption without foreign goods.
Imports shrank due to the crisis, and by 1933 they were 50% lower than in 1928. Now they were on the rise, a sign of a recovering economy but also a pressure against the balance of trade.
Just as imports rose, exports were falling. The international environment was hostile, with widespread protectionism. But the main reason for this was that by 1933 both the pound sterling and the dollar had devalued while the Reichsmark remained in its value, making German goods comparatively more expensive.
Compounding this problem, the Reichsbank could fund a trade deficit by running down its foreign exchange reserves but those were very limited.
And yet Germany absolutely needed an export surplus to pay debt and imports. Hence, the balance of trade was the most important limiting factor to the Nazi economy and played a central role in policy. Great pains were taken to lower imports and boost exports.