Exports rose 1.0% in March with imports up a reported 0.9%. That progress was taken away and then some in April.

The Census Bureau Advance Trade report shows the balance of trade widened by 0.3%. The details, as noted by Econoday are downright ugly.

Sharp declines in exports are unwelcome headlines in April's advance data on goods trade. The monthly deficit remains very deep, at $72.1 billion with exports falling 4.2 percent year-on-year and with imports also down, 2.7 percent lower. The deficit compares unfavorably with a $71.3 billion monthly average in the first quarter that marks a weak opening for net exports in the second quarter.

Capital goods are the US's largest exports and these fell 6.5 percent in the month to $44.3 billion. Compared with April last year, capital goods exports are down 3.7 percent. Auto exports are also down, 7.2 percent lower to $12.9 billion and 6.7 percent below last year. The only export component showing a gain is food & feeds which rose 0.5 percent to $11.2 billion but which is nevertheless 6.2 percent below April last year.

The decline on the import side is also led by a 3.5 percent decline for capital goods ($55.4 billion) but also includes 3.1 percent and 2.3 percent monthly declines in autos ($30.9 billion) and consumer goods ($54.2 billion) as well as a 1.1 percent drop in foods ($12.8 billion).

Global trade figures have been contracting and the latest US numbers are part of that picture. Today's report gets second-quarter GDP, already held down by contractions for April retail sales and industrial production, off to a slow start.

Note that country balances aren't posted with the advance report but will follow with the subsequent international trade report that will also include data on services.

Evaluating Winning Claims

Yesterday, I saw yet another claim that Trump is winning the trade war.

Last week, I saw claim that Trump "already" won the trade war.

A third person claimed this is all part of 3-D outmaneuvering and that Trump has more resolve than China.

Not Winning

This is not winning and it will never be winning.

  1. Trump changes his mind every month, if not week, yet he supposedly has more resolve. Yeah, right.
  2. Trump, a proven piss poor negotiator, is somehow supposed to negotiate magically.
  3. Trump has an election to win. The Chinese leader, Xi Jinping, doesn't.
  4. Trump is a braggart who demand the other side admit Trump's prowess.

Dealing With Trump

North Korea figured out how to deal with Trump.

Kim Jong Un gave Trump false praise while knocking Joe Biden.

Problem for China

The problem for China (and the US), is Trump demands China give in on "core" principles.

At that point China walked away. China had no other choice.

Pain Game

Mathematically, the US can likely inflict more pain on China. It is always the case that importers like the US can place more tariffs than vice versa.


But since when does losing less constitute winning?

Rare Earths

China does have some serious ways to strike back such as blocking Rare Earth Elements used in weapons, magnets, cell phones, and other sensitive devices.

Once again,we have seen superficial commentary that rare earths are not really rare (a true statement) thus the US can get other suppliers (a falsehood).

The problem is rare earths are extremely polluting and one does not exactly start a mine overnight. We went through this once before and recall what happened.

  1. China reduced supply of rare earths
  2. Rare earth prices skyrocketed
  3. New sources came into production within a couple years
  4. Price crashed
  5. China further flooded the markets
  6. The new Western sources lost money and went out of business.

This is not exactly winning by either side, but the position is the same as before: China supplies 80% of the production as no countries other than China are willing to deal with the toxic, radioactive sludge that producing rate earths entails.

Meanwhile, us weapons manufacturers, cell phone makers, etc. need these rare earths.

For further discussion, please see Trade Hardball: China Threatens to Cut Off US Supply of Rare Earth Elements.

Those who downplay the rare earth angle because there is plenty of "supply" have not thought things through.

Yes, it is a short-term thing. But it's short-term pain for the US at election time.

Bond Market, Stock Market

The bond market, the stock market, and the global trade numbers all tell the same story: Trump isn't winning.

A Full-Blown Trade War is Now the Base Case.

Trade War Over Quickly?

The joke of the week, last week was Trump's blowhard comment Trump Says "Trade War Could be Over Quickly".

I asked: Why should anyone believe Trump?

The only way the trade war will be over quickly is if Trump, not China, caves.

Recession Warning

Meanwhile, the yield curve flashes a bright red recession flag.

Good luck with that.

Mike "Mish" Shedlock

Collapse in Trade: Exports Down 2.7%, Imports Down 2.2%

The trade deficit in goods shrank a bit but the real story is a sharp slowdown in trade.

Trump's Trade War With China: The US is Not Winning

Think trade wars are easy to win? Think again.

Nobody Wins, But Germany and EU Hurt Most in Global Trade War

A set of pictures shows why Trump is convinced he can win a trade war.

Trade Deficit Jumps 5.5% as Exports Decline and Imports Rise: Winning Not

Several advance economic reports for June came out today. Inventories were flat and the trade deficit rose.

Collapse in Global Trade

International trade volumes are negative year-over-year for the first time since the great recession.

Cross-Border Trade Dives: Imports and Exports Each Decline 2.2 Percent

The overall picture is one of weakening trade. Year-over-year, the trade deficit is up 2.0%. Trump won't be pleased.

Net Exports Decline, Trade Deficit Rises: Exports +3.0%, Imports +3.7%

Trump will not exactly be pleased as the trade deficit in goods is headed the wrong way for his liking.

China Exports, Imports Soar: Global Trade Outlook Improving?

Chinese exports accelerated in May. The New York Times notes China May Exports, Imports Beat Forecasts.

Trade War With China Morphs Into Currency War: Biggest Loser is the EU

Those who think "trade wars are good and easy to win" need to stop and reflect on currency wars.