Have U.S. tariffs on Steel and Aluminium imports really increased domestic production?

We wrote about the economics behind the 25% tariff on Steel imports and 10% tariff on Aluminium imports to the United States earlier this year. One of the main justifications of the tariffs were that they will increase domestic production. Some statistics released earlier this week provide an answer to whether the tariffs have really increased domestic production.

Continue reading “Have U.S. tariffs on Steel and Aluminium imports really increased domestic production?”

Something strange is happening in the global economy right now

Everyone seems to be focussing on the equity markets recently, but equity markets haven’t really moved much over the past one month. Over the past month, major equity markets have lost between 1.5% to 4%.

The real action is in bonds and commodities. And trade seems to be flourishing too.

10-year government bond yields of major economies are lower by 5% to 40% (in relative terms not absolute terms) in just the past month. 10-year German bonds are down 12 bps over the past month. That wouldn’t sound much but they are down 28% from 42 bps to 30 bps. U.K. yields are down 8%, U.S. yields down 5%, Japanese yields down 40%. Even Greek yields are down 20% over just the past month. Does the market anticipate a pause in interest rate rises? It would appear so.

Continue reading “Something strange is happening in the global economy right now”

14 things about U.S. trade and trade tariffs

1. The U.S. has the 13th lowest average tariffs in the world as per the World Trade Organisation

We wrote about average import tariffs or custom duties per country, the United States has the 13th lowest tariffs in the world (out of the 165 members of the World Trade Organization) at only 3.48%.

2. … but the U.S. only charged 1.65% in tariffs in 2017

The WTO number is averaged across all products; the actual tariffs could be different based on the product mix of imports as well as any special trade deals the country may be part of.

In the case of the U.S., the actual import tariff or custom duty was just $38.49 billion or 1.65% of the value of $2.34 trillion in imports in 2017.

3. The U.S. did have a Trade deficit with Canada in 2017

Canada was the largest export market with exports of $282.47 billion in 2017. Canada was also the third largest market for imports behind only China and Mexico with total imports of $299.98 billion and a trade deficit of $17.5 billion. The trade deficit itself with Canada was the 12th largest for the U.S. in 2017.

4. All constituent countries taken together, the European Union was the largest export market for the U.S. in 2017

The U.S. had exports worth $284 billion to the 28 European Union Countries in 2017, beating Canada with $282.5 billion of exports in 2017. Continue reading “14 things about U.S. trade and trade tariffs”