China Posts First Trade Deficit Since February 2017 As Exports Tumble, But Not Because Of Trade War

Overnight, China surprised the market with its first trade deficit in more than a year amid escalating trade frictions with the United States, however there may be less than meets the eye here, at least for now.

China's state customs announced that in March export growth unexpectedly dropped -2.7% Y/Y, far below the consensus estimate of an increase of 11.8%. 

Looking at the details, for exports to major destinations, exports growth dropped broadly. Specifically, for major DMs, exports to EU, US and Japan decelerated -7.0% yoy, -5.6% yoy and -3.7% yoy, respectively. For major EMs, exports to ASEAN grew by 1.4% yoy from a strong increase of 36.2% yoy in February.

At the same time, import growth rebounded 14.4% Y/Y, more in line with expectations of a 12.0% rebound, although in Yuan terms imports rose a slower-than-expected 5.9%, missing expectations for 7.5%.

For commodity imports, growth went down both in volume and value terms broadly. Specifically, in volume terms, iron ore imports contracted 10.2% yoy, vs. +0.9% yoy in February; crude oil imports grew 0.6% yoy, vs. +1.5% yoy in February; steel products imports decreased by 5.1% yoy, vs. -5.8% yoy in February. In value terms, iron ore imports continued to contract by -19.3% yoy, vs. -5.4% yoy in February; crude oil imports grew 19.1% yoy, vs. +26.4% yoy in February; steel products imports increased by 11.3% yoy, vs. +11.5% yoy in February.

Of note, the country imported 5.66 million tons soybeans in March, down 11 per cent yoy and a 18% plunge compared to last month, while crude oil imports increased over 7% month-on-month in March to 39.17 million tons, equivalent to 9.22 million barrels per day, which is the second highest on record only after the 9.57 million barrels per day set in January this year.

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These Are The 10 Companies That Dominate the Global Arms Trade

The world puts $1.69 trillion towards military expenditures per year, and about $375 billion of that goes towards buying arms specifically.

Whether it is guns, tanks, jets, missiles, or ships that are on your shopping list, in the international arms community, as Visual Capitalist's Jeff Desjardin notes, there is a supplier for any weapon your country desires.

USA, USA!

While it is common knowledge that the United States plays a big role in the global arms trade, the numbers are still quite astounding.

Of the top ten companies by sales, firms based in the U.S. make up seven of them. That includes the clear #1, Lockheed Martin, which had $40.8 billion in arms-related sales in 2016, as well as the remaining constituents of the top three: Boeing and Raytheon.

Further, on SIPRI’s wider top 100 list, a good proxy for total arms sales globally, U.S. defense companies accounted for a whopping 58% of total global arms sales. That adds up to $217.2 billion in 2016, a 4.0% rise over the previous year.

ROUNDING OUT THE TOP 10

Only three companies make the top 10 leaderboard from outside of the United States.

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We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy

Exports fell precipitously during the last two recessions, and now it is happening again.  So how in the world can anyone make the claim that the U.S. economy is in good shape?  On my website I have been repeatedly pointing out the parallels between the last two major economic downturns and the current crisis, and I am going to discuss another one today.  Since peaking in late 2014, U.S. exports have been steadily declining, and this is something that we never see outside of a major recession.  On the chart that I have shared below, the shaded gray bars represent the last two recessions, and you can see that exports of goods and services plunged dramatically in both instances…

And this chart does not even show the latest numbers that we have.  During the month of January, U.S. exports fell to a five and a half year low…

The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter.

The Commerce Department said on Friday the trade gap increased 2.2 percent to $45.7 billion. December’s trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months.

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