Trade details

The U.S. trade deficit was narrowed as published yesterday with October figures, due to government shutdown. This is therefore a backward looking figure. But it’s still relevant to see trends. The question is, do we have a trend down for this deficit? Look a the charts below: the September figures was $48.1Bn, and the newly released October one was $29.4Bn, a reduction of $18.8Bn. This is good, and should give credit to this administration. But the details are important. The bulk of the reduction has to do with gold exports ($17.1Bn), which is not really the traditional trade related item that we should expect. It’s correct, and accurate, but it’s not good for the economy or the Americans. It will make GDP increase, but an argument can be made that it’s not as good as if it was related to other exports such as soy, EVs, or computers. Since we’re going through muddy waters, these details are important, because the headline and the meaning can differ significantly.

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