For The First Time In A Long While, The Volume Of World Trade Has Turned Up

For the first time in about a year, the volume of international trade turned up in the third quarter. Emerging market exports increased in the third quarter at the fastest pace in a year due to a rebound in exports to the advanced economies.

We, of course, simply don’t know whether this development represents a genuine turning point in terms of the global economy.

The reason for continued uncertainty is that world trade has been battered by slowing global growth, the US-China trade war, and of course the escalating tariff threat posed by Donald Trump, the proudly proclaimed tariff man.

There has also been a bit of positive news suggesting a stabilization of manufacturing production in Germany.

On the more optimistic front, despite a continuous stream of threats from the White House, both the US and China seem interested in de-escalating their trade war. In other words, whether the recent global trade stabilization represents a true turning point seems to hinge heavily on the White House and Trump’s irrational and raging comments.

For example, as the National Bank points out in a recent article, it is possible that the US will follow up on its tariffs on $7.5 bn worth of goods imports from the European Union with even more aggressive measures later this year, aimed primarily at European autos.

Trump’s trade resentment to China has some merit since the US does have a $419 billion trade imbalance with China.