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.
Does a balance of payment (or trade) surplus equate higher growth? Not necessarily, Australia which has had deficits for over forty years has grown faster than Germany which has had over forty years of surpluses. Does a current account surplus (i.e. exports greater than imports) mean a nation is doing better than other nations with current account deficits? The answer is no, what really matters is why the deficits exist.
U.S. trade with the world has grown despite tariffs and tariffs rhetoric in the first half (January to June) of 2018. There is one point of view that trade grew to avoid tariffs before they were implemented which might be partially true. Here are the key takeaways and the dataset,
- The total trade surplus for the European Union increased from €15.6 bn in Q1 2017 to €19.1 bn in Q1 2018, total exports were €1.34 trillion and total imports were €1.33 trillion
- 10 of the 28 European Union countries had a trade surplus in Q1 2018 and 18 had a trade deficit
- Germany had the largest trade surplus in Q1 2018 at €62.2 bn, Netherlands at €15.8 bn and Ireland at €12.4 bn
- The United Kingdom had the largest trade deficit in Q1 2018 at €41.1 bn, France at €21.2 bn and Spain at €7.9 bn
Here are all trade datasets (by country and product category) for the US for 2017 (data aggregated from trade.gov – US Department of Commerce and export.gov),
US Trade in 2017 by Country
This is how much the US Dollar ($) has lost in 2017 and 2018 (till date), Continue reading “This is how much the US dollar lost against major currencies in 2017 and 2018 (so far)”