World Trade Levels Worsen
ING Group Economist Timme Spakman highlighted the current concerning state of world trade, detailing several factors that are behind this situation.
“Trade tensions have slammed the brake on world trade growth in 2019," said Sparkman on a recently published report.
As it is usual lately, he attributed this phenomenon to the world trade crisis, caused by President Donald Trump's trade feuds against key world players like China, Japan, and the European Union, adding that despite this mainly affects the trade flows between the United States and those countries, the effect is widespread.
"New trade figures released by the CPB show a deceleration in trade growth after two months of MoM growth," he continued making reference to the fact that world trade levels fell 1.3 percent (monthly) and 1 percent (quarterly) according to a report released by the CPB World Trade Monitor.
Despite the recent positive signs regarding this matter, as they're currently advancing trade talks, officials from both countries have expressed their ambiguity about the future of them.
"In recent weeks, it looked like the US and China were approaching a phase one deal," he continued, "However, officials from both parties have been giving mixed signals, highlighting the fragility of the talks,” he added.
He added that the political crisis in Europe boosted also by Trump's aggressive behavior towards the Union as well as the Brexit Uncertainty, aided this negative sentiment in the global markets.
“And uncertainty still reigns in Europe," he said, " Tariffs on American automotive imports seem to be off the table for now, as President Trump missed the 14 November deadline to take a decision on the matter,” he added.
This data undermined the hopes for economic recovery since World Trade expanded 0.5 percent in August, which led many to think that the situation was improving.
Regarding the United States and China, the data is particularly concerning. US import volumes went down by 2.1 percent in September(Monthly). In China, imports fell by 6.9 percent, affecting import demand among other Asian countries.
“Due to regional and global value chains, the fall in Chinese imports also resulted in a significant decline in import demand among other Asian countries,” he said.
Sparkman finished his statements saying that despite they believe that the situation is eventually going to stabilize at the end of the year, they don't seem likely a "substantial pick-up in trade growth" for next year even if trade tensions fade.
By 11:34 GMT the US dollar went up against the Chinese Yuan by 0.06 percent, hitting the 7.0404 level.