A global trade contraction may go hand-in-hand with a global depression. From MN Gordon at economicprism.com:
Trade tariff policies continue to drive uncertainty in financial markets. Stocks, bonds, and the dollar itself move to the daily words of Team Trump.
Are extreme tariff policies one of President Trump’s ‘art of the deal’ tactics? Or is the ground shifting beneath the feet of the global economy and financial markets?
This week, to the stock market’s delight, was all about damage control. Treasury Secretary Scott Bessent, while delivering remarks at the Institute of International Finance Global Outlook Forum, clarified that “America First does not mean America Alone.” This came a day after Bessent stated that the ongoing tariff showdown against China is “unsustainable” and that he expects a “de-escalation” in the trade war.
When you play with fire, you’re gonna get burned. In this regard, the initial damage has already been done. But, of course, there’s always more to come.
According to Port Optimizer, scheduled import volumes for the Port of Los Angeles for the week ending May 3 show a 28.53 percent week-over-week decline. What’s more, for the week ending May 10, scheduled import volumes are projected to be down 34.54 percent year-over-year.
Could this be the start of a long-term global trade contraction?
World trade cycles over the last 200 years have often expanded for such lengthy durations that people come to believe they’re permanent. These extended expansionary episodes compel people to think increasing global trade is a linear phenomenon. That it is destined to continue without interruption.
For example, trade as a share of global gross domestic product increased from about 25 percent in 1970 to 63 percent in 2022. Shouldn’t this increase in trade continue indefinitely?
China accounts for 54% of all Asian imports to the tune of $438 billion.
Not Trump’s fault that we got to this point.
You can fight the oligarchs on K-Tel records at Hot Topic and fund comrade Bernie’s private jet at $27 a shirt, comrade.
Because the 19th century and 1960s LARP never gets old.