Economists tell us that no one ever wins a trade war, but it is safe to say that some of the losers lose more than others.
Today, Xinhua reports:
“Continuing the steady growth momentum, China's foreign trade of goods exceeded 20 trillion yuan (about 2.8 trillion U.S. dollars) from January to August, up 3.6 percent year on year, according to the latest figures by China's General Administration of Customs.” [my highlighting]
Meanwhile, the US Bureau of Economic Analysis reports:
Year-to-date, the goods and services deficit increased $28.2 billion, or 8.2 percent, from the same period in 2018. Exports decreased $3.4 billion or 0.2 percent. Imports increased $24.9 billion or 1.4 percent.
While there is some good news in the month-to-month data, the year-to-year data shows that, although no one ever wins a trade war, China is suffering less so far than the US, which most likely goes to show that 1) The Trump tariffs have not deterred Americans from buying necessary imports from China, and 2) China trades with many countries other than the US.
Xinhua also reports:
“China's trade with the Belt and Road countries totaled 5.83 trillion yuan for the January-August period, up 9.9 percent year on year.”
“China's exports to Russia grew by 11.5% in the first month of 2019 and exceeded $4.3 billion.”
The US deficit increased less in June over May but much of this owed to shale oil and gas exports, and that has a major drawback. The fact is, most shale oil investors have been losing their shirts and many have gotten out of the market, as we detailed here.
It is therefore hard to imagine that US shale oil will continue to fuel a further increase in US energy exports. And energy is the sector that Trump was counting on to make America great again.
This leaves a big question mark dangling above the euphoria over America’s future.