With the recent announcement of the so-called Phase 1 ‘Trade Deal’ with China, the U.S. President has claimed that his Administration is winning the trade war with Beijing and that the U.S. economy is gaining from the rounds and rounds of tariffs and trade restrictions imposed on its bilateral trade with China.
Liquidity moves markets!Follow the money. Find the profits!
Here is a tangible set of metrics showing the cost indices for U.S. trade (exports and imports) over the period of President Trump’s tenure, compared to the track record of his predecessors:
In basic terms, the adverse movements in imports prices have been more than offset by the positive movements in export prices since the start of the Trump presidency. However, two caveats to this warrant more cautious analysis of this data:
- Mr. Trump’s presidency has not been associated with statistically distinct imports prices performance, compared to the Obama administration (see averages and levels for import price indices in the above), while Mr. Trump’s tenure has been associated with markedly lower export prices for the U.S. exporters (the blue line above); and
- The gap between export prices and import prices (positive and larger gap signals higher relative prices of exports compared to imports – a net positive for the external balance), under Trump administration remains well below previous administration’s track record (see chart next).
Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.