World Trade, through Trump’s Trade War, Covid/Recession, Russian Aggression

From the Netherlands Bureau of Economic Policy Analysis (CPB), world trade volume through April 2022:

Figure 1: World trade volume, 2010=100 (blue), forecasted using ECM (blue square). NBER defined peak-to-trough US recession dates shaded gray. Source: Netherlands CPB, NBER, and author’s calculations.

World trade volume has been declining since December 2021, on a seasonally adjusted basis. My forecast, based on lagged (log) levels of world trade and container throughput index, and first difference of log container throughput, yields a slight decrease in trade in May (the May number will be released by CPB on Monday).

It is interesting to note that trade was rising before worries of Russian aggression heighted in November. Trade volumes have declined since the invasion. It is also of interest that trade volumes decreased long before the recession of 2020, and one can in fact date the local maximum to a few months after the first round of Section 301 tariffs went into effect (thanks, Trump!).




40 thoughts on “World Trade, through Trump’s Trade War, Covid/Recession, Russian Aggression

  1. Macroduck

    Off topic –

    The audacious PR plot that seeded doubt about climate change

    “Drawing on thousands of newly discovered documents, this three-part film charts how the oil industry mounted a campaign to sow doubt about the science of climate change, the consequences of which we are living through today.”

    The article and the film take an historical perspective, pointing out that we are now living with the consequences of past efforts to put profits ahead of public welfare. There is little mention of continuing efforts to deny the reality of climate change and its human causes.

    1. pgl

      “Thirty years ago, a bold plan was cooked up to spread doubt and persuade the public that climate change was not a problem. The little-known meeting – between some of America’s biggest industrial players and a PR genius – forged a devastatingly successful strategy that endured for years, and the consequences of which are all around us. On an early autumn day in 1992, E Bruce Harrison, a man widely acknowledged as the father of environmental PR, stood up in a room full of business leaders and delivered a pitch like no other. At stake was a contract worth half a million dollars a year – about £850,000 in today’s money. The prospective client, the Global Climate Coalition (GCC) – which represented the oil, coal, auto, utilities, steel, and rail industries – was looking for a communications partner to change the narrative on climate change.”

      How much did these liars pay CoRev? It does seem the GCC was terrified that Al Gore was in the White House.

      1. CoRev

        Hey Barking Bierka – the Disgusting NYC Jerk, you are getting your policy on climate change. No one has yet refuted my claim that the War on Fossil Fuels, a significant part of energy, environmental and climate policy, has also been a significant cause of today’s inflation allover the world.

        Show me wrong. Oh, don’t forget that list of externalities.

        1. pgl

          Still chasing your own tail even after your bosses have been exposed?

          Now no one is answering your stupid little set of BS questions? Get over it and get back to chasing your tail.

        2. Macroduck

          Here again, part of the “fake science” playback. It is always possible to make a claim, as CoVid has done regarding the invasion of the hydrocarbon snatchers. Who has the burden of proof? Not the guy making the hyperbolic claim? No, no. Just toss the nonsense on the table and insist that the other guy has to refute it. It’s a trick from junior high debate.

          Externalities? There’s a huge literature on the externalities of fossil fuel use. Again, CoVid insists that somebody else is responsible for actual intellectual effort. All he has to do is make demands. He won’t bother finding out for himself, because that’s not the point. It’s in the “fake science” playbook. You can look it up.

          1. CoRev

            MD, I guess you are now reading my comments. Prior you claimed to ignore them because you knew what they’d say. If you think this is a trick from junior high debate. What do you think of some one who quotes another, then writes an article without further referencing or refuting the quote (twice now)?

            Yes, yes there is: “Externalities? There’s a huge literature on the externalities of fossil fuel use. ” Why not help our NYC friend with a list of them. Or better still you could just refute the solar comment. Simple arithmetic and easy logic will get the answer.

          2. pgl

            Ahem – his response was dumb even for him. Like it is my job to inform this lying troll what externalities are? Oh that’s right – he thinks fossil fuel emissions create positive externalities.

          3. CoRev

            Woof, woof goes Barking Bierka – the Disgusting NYC Jerk: “Oh that’s right – he thinks fossil fuel emissions create positive externalities.” Not emissions but fossil fuels and the original comment dealt specifically with coal.

            BTW, where so you think today’s economy would be without fossil fuels?

            That’s alright poor fella, one day you get something correct. Just not today.

        3. 2slugbaits

          CoRev Since you’re a big fan of agricultural subsidies I’m not surprised that you’re also a big fan of fossil fuel subsidies. If your point is that inefficient subsidies to fossil fuels have artificially lowered fossil fuel market prices and passed the balance of the true costs onto other sectors, then you have a point. In that sense green policies would tend to contribute to (mis)measured inflation. Of course, you would be making a stupid point. The externality problem means that the true costs of fossil fuels are not captured at the pump price, so it’s no surprise that fossil fuel prices would rise if you adopted policies that corrected for that market failure. That’s how economics works. The goal of economics is not to subsidize fuel costs in order to appease myopic voters. That kind of bad policy is the kind of thing we’d expect to find in Venezuela or the old Soviet Union. So tell us, are you really a closet Marxist who supports policies that manipulate prices for political gain? Oh wait…you voted for Nixon not once but twice, so I guess you really do believe in putting partisan politics above economic welfare.

          And for another thing, it’s not clear just what battles have been fought and won by those of us concerned with climate change. You’ve still never really told us which specific policies you have in mind. All you’ve done is consistently bob-and-weave and lie about having answered that question. You called yourself a policy wonk. I think you meant to say a policy wank.

          1. CoRev

            More 2slugs gibberish, and just flat lying: “You’ve still never really told us which specific policies you have in mind. ” How many times do I need to repeat the “War on Fossil Fuels”. Y’ano that policy you want expanded, enlarged, increased, and strengthened.

          2. 2slugbaits

            CoRev Y’ano that policy you want expanded, enlarged, increased, and strengthened.

            No…the policies that I want to commence. To date they haven’t been implemented. Your so-called “War on Fossil Fuels” resembles what was known as “the Phony War” back in the day.

          3. CoRev

            @slugs, ROFLAO with this: “No…the policies that I want to commence. To date they haven’t been implemented.” Please write that policy so I can laugh again.

            Just for giggles tell us how that ole world-wide “War on Fossil Fuels” has not impacted inflation.

        4. Noneconomist

          CoRev: “my claim” ?
          Back to just you? Strange, and quite a comedown from your “we, citizens of the world” post where your views were also those of, uh, heretofore uncounted “citizens of the world.”
          Just a guess:you got canned from a job you never had to begin with.

          1. CoRev

            Nonecon, keep guessing. Better still refute the claim about solar not fulfilling daily peak demand.

          2. Noneconomist

            Simple question you can’t answer: “who’s we”? But having moved beyond egotism to egocentrism, it’s fairly obvious to see who “we” is.

    2. pgl

      ‘Though few outside the PR industry might have heard of E Bruce Harrison or the eponymous company he had run since 1973, he had a string of campaigns for some of the US’s biggest polluters under his belt. He had worked for the chemical industry discrediting research on the toxicity of pesticides; for the tobacco industry, and had recently run a campaign against tougher emissions standards for the big car makers. Harrison had built a firm that was considered one of the very best.’

      Supporting Big Tobacco and toxic pesticides – all the best clients if one puts money ahead of the well being of your fellow man.

    3. pgl

      Speaking of climate change deniers – catch what Al Gore thinks of them:

      “You know, the climate deniers are really in some ways similar to all of those almost 400 law enforcement officers in Uvalde, Texas, who were waiting outside an unlocked door while the children were being massacred,” he said in an interview with host Chuck Todd to air Sunday on NBC’s “Meet the Press.” “They heard the screams, they heard the gunshots, and nobody stepped forward.” He added about that May shooting: “And God bless those families who’ve suffered so much. And law enforcement officials tell us that’s not typical of what law enforcement usually does. And confronted with this global emergency, what we’re doing with our inaction and failing to walk through the door and stop the killing is not typical of what we are capable of as human beings. We do have the solutions.”

    4. Anonymous

      not withstanding the climate change debate…..

      solutions sold by the climate apostles are not suitable to a growing economy and expanding standards of living

  2. pgl

    “It is interesting to note that trade was rising before worries of Russian aggression heighted in November. Trade volumes have declined since the invasion. It is also of interest that trade volumes decreased long before the recession of 2020, and one can in fact date the local maximum to a few months after the first round of Section 301 tariffs went into effect (thanks, Trump!).”

    Of course Trump was anti-trade as he hates dealing with anyone besides white people. But Putin is damaging world trade because he hates Ukrainians. Oh wait – JohnH has gone on anti-trade rants many times. Maybe this is why he adores Putin’s war crimes.

  3. pgl

    How low in the gutter does Alan Dershowitz want to go?

    Alan Dershowitz defends Bannon against conviction controversy
    Dershowitz spoke with Newsmax host Greta Van Susteren late Friday on the subject of Bannon
    In an interview with Newsmax host Greta Van Susteren late Friday, former Harvard Law professor Alan Dershowitz came down on the side of former Donald Trump adviser Steve Bannon after a jury took only three hours to convict him on two charges of contempt of Congress for ignoring a subpoena. According to Dershowitz, who recently jumped back into the news by complaining he is being shunned in Martha’s Vinyard because of his views among other issues, Bannon’s trial was “unconstitutional” and will be overturned upon appeal. Speaking with the host he explained, “The only provision of the Constitution, which appears basically twice, is trial by jury in and in front of a fair jury. Number one, he didn’t have a fair jury. Number two, the judge took his defenses away from him.” Asserting that jury pool was drawn from a community that is “97 percent Trump haters,” he continued that Bannon wanted to invoke “executive privilege” but that the judge wouldn’t allow — with the Harvard professor glossing over the fact that legal experts have argued he was not covered after leaving Trump’s employ.

    Excuse me? First of all Greta only pretends to be a lawyer but her day job is spewing Trumpian garbage. Secondly, Dershowitz may teach at HARVARD but his field is not Constitutional law. Harvard relies on real experts such as Laurence Tribe.

    Executive privilege is not an excuse not to appear and how the eff does it apply to someone who did not work in the White House? Even if Bannon were the Chief of Staff – privilege does not cover treason.

    OK Dershowitz may teach criminal procedures at HARVARD but his claim the jury pool was tainted is laughable. OK – Bannon did have incompetent attorneys but maybe Dershowitz could have represented Bannon before this judge pro bono. He didn’t so may he should STFU.

    1. 2slugbaits

      “The only provision of the Constitution, which appears basically twice, is trial by jury in and in front of a fair jury.

      Dershowitz should read the Sixth Amendment. For his edification, here is the relevant part:

      In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law…

      It says he has a right to a speedy trial by jury. He did. The jury found him guilty. It says that the impartial jury will come from the state or district wherein the crime shall have been committed. That is exactly where his trial took place.

      And by the way, the Constitution makes no mention of “executive privilege.” That’s an implied executive power built around legal reasoning. If you’re someone who says the Court ruled wrongly with Roe v. Wade because Griswold and the right to privacy isn’t an enumerated right, then you should also accept that Court rulings upholding executive privilege were also wrongly decided because that is not an enumerated Article II power.

      1. pgl

        Dershowitz is no Laurence Tribe for sure. Then again Scalia never read the 2nd part of the 15th Amendment.

        1. 2slugbaits

          Scalia also flunked grade school grammar and never learned the difference between a dependent clause and an independent clause.

  4. pgl

    The Kansas City Star roasts real man Josh Hawley for being a cowardly little girl:

    As the editors were quick to point out, Hawley is now a national “laughingstock” because he has been exposed for the “fleeing coward” he is.Getting right to it, the editors wrote, “During Thursday night’s televised hearings of the House committee investigating the Jan. 6, 2021, coup attempt at the U.S. Capitol, Rep. Elaine Luria showed video of Missouri’s junior senator that will surely follow him the rest of his life.” After noting that the conservative senator has already taken his lumps on social media after the nationally televised humiliation that has spectators at the committee hearing openly laughing, the board buried him for his oft-stated worries about American “masculinity.” “A signature Hawley issue is masculinity — as in, how little of it American men seem to have these days. It’s a frequent topic in his speeches and on his podcast, where ‘the left-wing attack on manhood’ is a dire threat to our society. Regnery Publishing is set to release his book ‘Manhood: The Masculine Virtues America Needs’ next year. Twitter didn’t see much virile bravado as he ran from the mob,” they wrote.

  5. James

    The GOP is now in complete “Trump was great – but it is time to move on! And inflation!, inflation!” messaging mode. Thanks Menzie for posting. IMO – this is another example of the GOP causing a recession/doing a crap job with the U.S. economy/executing a criminal money grab while the Dems come in with responsible governance and clean up the mess. Of course – it is great for GOP messaging because while the Dems are dealing with the pain of the hangover – people believe – despite all data to contrary that the GOP is better on the economy.

    1. Moses Herzog

      OK, I’m trying to control my extreme extreme ANGER right now. Are you saying (similar to Professor Chinn right now) that western nations purchasing Russian natural gas “has low impact” now”??? This is the angriest and most disagreed I’ve ever felt to Professor Chinn, that those purchases of natural gas, seemingly to him, are “nothing much”

  6. pgl

    Good grief. Senator Sanders has joined the right wing opposition to the Biden semiconductor. OK as written it does add to the long-term deficit a wee bit. OK – you can call it corporate welfare. Of course there is a simple solution to both – require US corporations to pay more in corporate income taxes by getting rid of some of those 2017 goodies such as FDII and GILTI. Oh wait – Manchin and Mitch McConnell would oppose my sensible idea. Which is to say the Senate right now is a farce.

  7. ltr

    July 24, 2022

    China launches Wentian lab module to its space station
    By Guo Meiping and Cao Qingqing

    China successfully launched its space station lab module Wentian, the largest spacecraft ever developed by the country, into orbit on Sunday afternoon.

    The Long March-5B Y3 rocket, carrying Wentian (which means “quest for the heavens”), blasted off at 2:22 p.m. Beijing Time from the Wenchang Spacecraft Launch Site in south China’s Hainan Province.

    About eight minutes later, the lab module separated from the carrier rocket and entered its preset orbit. The China Manned Space Engineering Office (CMSEO) declared the launch mission a complete success.

    In the next few hours, the Wentian will rendezvous and dock with the Tianhe core module in orbit, forming the second part of China’s three-module space station.

    On July 17, the Tianzhou-3 cargo craft undocked from Tianhe, leaving its front docking port for the upcoming Wentian lab module.

    The Shenzhou-14 crew currently in the core module will then enter the Wentian cabin. They will become the first Chinese astronauts to witness the docking of two large space station modules in orbit.

    The trio watched the launch of the Wentian in orbit.

    About the Wentian lab module ….

    1. ltr

      July 24, 2022

      China’s C919 jet close to certification after completing test flights

      China’s first homegrown large passenger aircraft, the C919, is nearing certification after completing all its test flights, the manufacturer said on Saturday.

      All six test planes had finished their test flights by July 19, and the program entered the final stage of receiving certification, according to a post on the official social media account of Commercial Aircraft Corporation of China (COMAC).

      Certification from the Civil Aviation Administration of China is the final step required for commercial operations.

      The domestically-developed C919 represents a milestone for China’s ambition to crack the commercial aviation market. The country is among the world’s fastest-growing civil aviation markets….

  8. ltr–1bSvNL3KF7a/index.html

    July 22, 2022

    Eurozone economy shrinks as inflation spooks consumers

    Economic activity in the eurozone plummeted in July, a key survey showed Friday, with a big drop in manufacturing and high prices putting the brakes on consumers’ post-lockdown spending sprees.

    The closely-watched S&P Global monthly purchase managers’ index (PMI) fell from 52.0 in June to 49.4, below the 50-point level that separates contraction and growth.

    “Excluding pandemic lockdown months, July’s contraction is the first signaled by the PMI since June 2013,” and pointed to negative growth in GDP, said Chris Williamson, chief business economist at S&P Global, Reuters reported.

    “Although only modest at present, a steep loss of new orders, falling backlogs of work and gloomier business expectations all point to the rate of decline gathering further momentum as the summer progresses,” he said.

    The survey showed that the steepest decline in activity was felt in Germany, as the exporting powerhouse suffered the effects of high prices and anemic demand for its high-quality products….

    1. ltr

      July 23, 2022

      U.S. business activity contracts in July for first time in 2 years, survey shows

      U.S. business activity contracted for the first time in nearly two years in July as a sharp slowdown in the service sector outweighed continued modest growth in manufacturing, painting a glum picture for an economy stunted by high inflation, rising interest rates and deteriorating consumer confidence.

      S&P Global on Friday said its preliminary – or “flash” – U.S. composite output purchasing managers’ index (PMI) had tumbled far more than expected to 47.5 this month from a final reading of 52.3 in June. With a reading below 50 indicating business activity had contracted, it is a development likely to feed into a vocal debate over whether the U.S. economy is back in – or near – a recession after rebounding sharply from the downturn in early 2020 at the start of the COVID-19 pandemic.

      July’s fall marked the fourth monthly drop in a row and was largely driven by pronounced weakness in the services sector index, which fell to the lowest since May 2020 at 47.0 from 52.7 a month earlier. That was enough to offset relative steadiness in manufacturing, with the group’s factory activity index edging down to 52.3 from 52.7, indicating the sector was still growing but now at its weakest pace since July 2020….

  9. David O'Rear

    Back on topic, trade in the Euro Area (+8.1%) and the US (+9.4%) are double the global average (+4.2%) in Jan-Apr vs year ago, whereas China is -5.%.

  10. ltr

    July 13, 2022

    China’s June exports growth quickens as production recovers, imports grow slower
    By Zhang Xinyue

    China’s exports growth gained pace in June as production continued to recover from the pandemic, while imports expanded moderately, the General Administration of Customs (GAC) said on Wednesday.

    The June exports grew by 17.9 percent year on year in U.S. dollar terms, 1 percentage point higher than the previous month, GAC data shows, beating Reuters’ forecast of 12 percent.

    However, the import growth slowed down to 1 percent from 4.1 percent in May, missing market expectations.

    “The growth of foreign trade picked up significantly in May and June,” said GAC spokesperson Li Kuiwen.

    Since March, a new wave of COVID-19 spreading across China slowed down business activities and production, as many places, including the capital Beijing and financial center Shanghai, implemented different degrees of closed-off management.

    The easing of the pandemic and the government’s policy measures have helped foreign trade companies resume work and production since May in an orderly manner, said Li.

    Regarding the first half of 2022, China’s exports climbed by 14.2 percent from a year earlier and imports rose by 5.7 percent….

  11. ltr

    Notwithstanding the climate change debate, solutions sold by the climate apostles are not suitable to a growing economy and expanding standards of living.

    [ This of course is precisely what China is committed to showing and is showing to be incorrect and dramatically incorrect. ]

  12. baffling

    notice how world trade was tanking in the months before covid. the severity of the covid collapse makes people overlook just how bad trump had begun to drive world trade into the tank before all heck broke loose. ironically, covid probably saved the trump presidency. people would have naturally seen his failure had the pandemic not come along and overshadowed his poor performance. the economy was tanking either way. but covid gave trump and excuse, and he used it.

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