Solutions: No. No. No.
Determine 1: Internet exports in bn.Ch.2017$ SAAR (blue, left scale), nominal as share of GDP (tan, proper scale). NBER outlined peak-to-trough recession dates shaded grey. Supply: BEA, NBER, and writer’s calculations.
Not solely did web exports fall in quantity by the tip of Trump 1.0, so too did the web export share of GDP.
Determine 2: Imports ex-petroleum, (blue, left scale), agricultural meals, feeds and drinks (tan, proper scale), in bn.Ch.2017$ SAAR. NBER outlined peak-to-trough recession dates shaded grey. Supply: BEA, NBER.
Ag exports fell pre-pandemic, and solely rose within the post-pandemic ag growth. Imports of products excluding petroleum had been greater by the tip of Trump 1.0.
This might sound stunning if one targeted on the expenditure switching facets of tariffs, and thought overseas international locations wouldn’t retaliate towards US exports. On the latter, that at all times appeared foolish to me. On the previous, it’s essential to keep in mind that in a Mundell-Fleming mannequin underneath floating change charges, the change fee will have a tendency to understand, thereby offsetting partially the expenditure switching impact (even ignoring retaliation aimed towards US exports). Additionally, if financial coverage uncertainty rises with commerce wars then one can count on but extra greenback appreciation, tending to push up imports.
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