Trump inherited a strong dollar that was weighing on non-petrol exports. He layered on a fiscal stimulus that juiced demand and imports.
The net result: a record deficit in manufactures, even with a set of trade actions intended to bring the deficit down.
The net result: a record deficit in manufactures, even with a set of trade actions intended to bring the deficit down.
This data isn't seasonally adjusted, and October and November are typically seasonal peaks in the trade data - so annualizing the monthly data cheats a bit. But it still remarkable that the manufacturing deficit (ex refined petrol) exceeds manufacturing exports.
The manufacturing deficit in dollar terms was actually fairly stable from 2006 to 2012 or 2013 (I was disappointed by this to be honest, I had hoped it would start to reverse).
It has risen rapidly ever since the dollar appreciated in 2014 -- with Obama, and with Trump.
It has risen rapidly ever since the dollar appreciated in 2014 -- with Obama, and with Trump.
What's remarkable, to me at least, is that Trump is failing most on his own terms -
The bilateral trade deficit with China doesn't matter as much as he thinks it does (the overall balance is more important). But, for what it is worth, the monthly deficit with China has soared.
The bilateral trade deficit with China doesn't matter as much as he thinks it does (the overall balance is more important). But, for what it is worth, the monthly deficit with China has soared.
Annualizing the raw monthly data with China and HK is clearly cheating a bit.
What's happened is that the seasonal peak in imports from China hasn't been interrupted by the tariffs to date, while the seasonal surge in exports isn't there. No 'beans.
What's happened is that the seasonal peak in imports from China hasn't been interrupted by the tariffs to date, while the seasonal surge in exports isn't there. No 'beans.
China's retaliation tho has been more effective in Trumpian terms than in real terms. It has cut US ag and petrol exports to China, but not overall US ag and petrol exports (with ag that may change in November). So more of an impact on bilateral trade than overall trade
a blog on this is coming, but not til next week (alas).
am a bit of a broken record here, but big things are happening in the monthly data (after a bit of a false fall in the deficit in q2)
am a bit of a broken record here, but big things are happening in the monthly data (after a bit of a false fall in the deficit in q2)
