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Tag Archives: Trade Wars

Monthly Macro Monitor: We’re Not There Yet

It’s been a slow turnin’ From the inside out A slow turnin’ But you come about   Slow learnin’ But you learn to sway A slow turnin’ baby Not fade away   Now I’m in my car I got the radio on I’m yellin’ at the kids in the back ‘Cause they’re bangin’ like Charlie Watts   Slow Turning by John Hiatt   “How did you go bankrupt?” Bill asked. “Two ways”, Mike said. “Gradually and then...

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Contracting Factories, Curiously Rebounding Inbound Cars, And the Confirmed End of Decoupling

The US manufacturing sector may not be in as bad a shape as its German or Japanese counterparts, though it appears to be catching up on the downside. The Census Bureau reports today that new orders for all types of goods in all industries fell 1.6% year-over-year (unadjusted) in May 2019. This was the first minus sign for the broad category which includes both durable and non-durable goods manufacturing. Orders hadn’t fallen on annual basis since 2016. It is further evidence that the supply...

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Curve Sanity (Not What Most People Want To Hear or See)

Rate cuts will be insurance against whatever “trade wars” will throw at the global economy. That’s the current line from monetary officials in the US, anyway. The real question to ask is, how would they know? Starting with trade wars. Is that really what’s behind all this? The evolution of the curves told you everything you need to know, and tell you what to prepare for. It’s not just inversion that is noteworthy. They said all along there was no boom, even during the most maniacal parts of...

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Energy and commodities highlights: Middle East tensions, Panama Canal, global EV sales

The past week was marked by heightened geopolitical tensions as attacks on ships and oil infrastructure in the Middle East spread jitters through oil markets. On May 12, the UAE government said that four commercial vessels suffered “sabotage” in the Gulf of Oman, without giving more specific details about the nature of the attack. The following day, a drone attack halted flows through Saudi Arabia’s main oil transport pipeline to terminals and refineries on the Red Sea. The recent incidents...

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Who Pays The Tariffs?

I had some very interesting discussions on social media last night on who is paying for the U.S.-China Trade War.   It was kind of shocking that many didn’t even understand the basic tenets of economics yet have strong convictions held strongly.   Not good in the trading business. It reminded me of my days teaching frosh economics at the university and encountering the 18-year old ignoramuses who thought they were the second coming of Adam Smith, JMK, and Milton Friedman.  I must now...

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The Case For Free Trade

The Marxists and Socialists are winning the day, folks.   Apologies for the simpleton buzzwords but they are all the rage these days. The escalation of the trade war is bad, bad, bad news and could if we are not careful, end in a shooting war.   Many argue that one of the main factors that motivated Japan to bomb Pearl Harbor was the U.S. cutting off of trade, mainly in airplane parts and aviation fuel, with good reason, however, as imperial Japan was running rampant throughout Asia....

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Energy and commodities highlights: Trade wars, US LNG development, energy digitalization

Commodities and financial markets spent the past week watching for progress in US-China trade talks, but there was no firm outcome ahead of a May 10 deadline, leading to a further escalation of US-imposed tariffs. Without a resolution, a scheduled hike in tariffs kicked in on US imports of $200 billion worth of Chinese goods, from 10% to 25%. Talks were expected to resume on Friday, May 10, but China is now mulling the details of its promised response. The US LNG sector could be hit hard by...

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Trade Wars Have Arrived, But It’s Trade Winter That Hurts

There is truth to the trade war. That’s a big problem because it’s not the only problem. It isn’t even the main one. Given that, it’s easy to look at tariffs and see all our current ills in them. The Census Bureau reports today that the trade wars have definitely arrived. In March 2019, US imports from China plummeted by nearly 19% year-over-year. In the entire series which goes back to 1988, there are only three instances where it has been worse for Chinese manufacturers and one of those was...

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Some Background On China Trade Talks

Some perspective from a prior post on President Trump’s predisposition toward free trade. We hope for a good trade deal and China caves on everything.  We also hope for the end of poverty, world peace, and everyone to self actualize this year but will it happen? Come on, man, let’s be realistic.  China’s not about to give up it’s sovereignty to Trump.  See our post from yesterday. In my experience in participating in and negotiating several multibillion sovereign debt restructurings, a...

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Tariffs frustrate US-China trade in plastic resins and finished products

Trade in polyethylene resin and finished products slowed in the fourth quarter of 2018, becoming a casualty of the US-China trade war. Last year, the Trump Administration launched a full-scale trade war with China, imposing three rounds of tariffs worth a cumulative $250 billion on Chinese products. The move was intended to counter China’s practice of requiring US companies to turn over intellectual property as a condition for gaining access to the world’s second-largest...

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