Between Ouch And Boing

"Trade wars are easy - and they're easy to win." --Donald Trump, 2024 campaign

US Trade Deficit Widens in July; Capital Goods Imports Hit Record High

WASHINGTON, Sept 3 (Reuters) - The U.S. trade deficit widened sharply ⁠in ⁠July as strong domestic demand ⁠boosted imports, positioning trade to exert another drag on economic growth in ​the third quarter.

The trade shortfall increased 24.4% to $88.6 billion, the Commerce Department's Bureau of Economic Analysis and Census ‌Bureau said on Thursday. Economists polled ‌by Reuters had forecast the deficit at $90.0 billion.

The deterioration was flagged by data last week showing ⁠an import-driven surge ⁠in the goods trade deficit in July.

Domestic demand soared in the second ​quarter, a combination of both strong consumer spending and business investment in artificial intelligence. Demand is, however, being satiated with imports, helping to widen the trade deficit.

Imports increased 2.8% to $399.3 billion in July. Goods imports shot up ​3.7% to $320.6 billion. Imports of capital goods jumped $14.4 billion to a record high $140.3 billion, reflecting ⁠strong ⁠increases in computers, computer accessories ⁠and semiconductors, likely ​related to the AI buildout.

But imports of industrial supplies and materials, which include petroleum, dropped $1.8 billion. ​

Crude oil imports fell $1.8 billion ⁠amid lower prices.

Exports decreased 2.1% to $310.7 billion, with goods shipments dropping 3.0% to $201.0 billion. They were led by an $8.7 billion decline in industrial supplies and materials, mostly crude oil as well as nonmonetary gold, which is excluded in the calculation of gross domestic product. Capital goods exports, however, increased $1.9 billion. Consumer ⁠goods exports rose $1.7 billion, lifted by pharmaceutical preparations.

The goods trade deficit widened 17.3% to $119.6 ⁠billion in July. When adjusted for inflation, the goods trade deficit increased 12.7% to $106.4 billion. Trade subtracted 1.14 percentage points from GDP growth in the April-June quarter. The economy grew at a 1.5% annualized rate last quarter.

Imports of services decreased $0.6 billion to $78.7 billion in July, pulled down by charges for the use of intellectual property. Imports of transport services fell but those of travel services increased. Exports of services dipped $0.4 billion to $109.7 billion amid declines in travel, financial and transport services. Charges for the use of intellectual property rose ⁠as did exports of other business services.

Despite aggressive tariffs on imports, the United States posted record goods trade deficits with Mexico, Vietnam, Taiwan, Thailand, South Korea and Malaysia. The goods trade balance with Switzerland swung into deficit, while the shortfall with Canada decreased $3.7 billion ​to $3.2 billion in July. The U.S. and Canada are embroiled in a trade ​war.

More War & Higher Prices

As per usual, Trump struts around calling himself a hero for "stopping the war in the Congo", while he's busily ramping up the US military to fight it.

- and in the meantime, our anti-war POTUS is making everybody's lives worse with his stupid fucking "ideas" on trade, economics, and foreign policy -

About The Trade Deficit

What We All Knew

Trump's a fuckin' idiot. And anybody still supporting him is a fuckin' idiot too.

US Trade Deficit Widens, Capping One of Biggest Since 1960

The US trade deficit widened in December, capping a turbulent year of erratic tariff policy.

The goods and services trade gap expanded from the prior month to $70.3 billion, Commerce Department data showed Thursday. The shortfall culminated in a full-year deficit of $901.5 billion, still one of the largest in data back to 1960.

The December deficit reflected a 3.6% increase in the value of imports. Exports of goods and services declined 1.7%. The median estimate in a Bloomberg survey of economists called for a $55.5 billion overall shortfall.

The trade data were notably volatile in 2025 on a month-to-month basis as US importers reacted to a persistent drumbeat of tariff announcements from President Donald Trump. Gold and pharmaceutical imports were particularly choppy as companies raced to beat higher duties.

The increase in goods imports in December included gains in computer accessories and motor vehicles. The decline in exports largely reflected fewer outbound shipments of gold, according to the trade report.

The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product, which will be released on Friday. Before the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add about 0.6 percentage point to fourth-quarter growth, now estimated at 3.6%.

After adjusting for changes in prices, which filters into the real GDP measurement, the merchandise trade deficit widened to $97.1 billion in December, the most since July. Trade in gold, unless used for industrial purposes such as in the production of jewelry, is excluded from the government’s GDP calculation.

Trump has leaned on tariffs as part of his strategy to reduce reliance on foreign goods, encourage domestic investment and correct decades of declines in manufacturing employment. He and his economic team have criticized research concluding that Americans have borne the costs of tariffs.

- and -

Hassett Attacks NY Fed for Study on Tariffs Hurting US Companies

National Economic Council Director Kevin Hassett said a study from the Federal Reserve Bank of New York showing US companies bear most of the tariff burden “is an embarrassment” and the people associated with it should be “disciplined.”

“What they’ve done is they put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class,” Hassett said Wednesday on CNBC.

Hassett said US consumers will be made better off by tariffs.

The paper published last week by the New York Fed found that nearly 90% of the economic burden from tariffs in 2025 was borne by US companies and consumers. The New York Fed did not immediately respond to a request for comment.

Today's Belle

From the comments: "Dude - you broke up with us, remember? You don't get to complain when we start to see other people."

Stand Up - Fight Back

Brace For Impact

There's this thing they teach in Econ 101 (and any given Marketing Seminar) called elasticity.

Trump's tariffs are in effect, and the last un-tariffed cargo ship we're expecting from China sailed a week or two ago.

It takes 2 or 3 or 4 or 5 weeks for the goods to sail o'er the bounding main, and then another week or more to get the stuff from the ports to the local Walmart.

So we can expect interruptions and delays and shortages and higher prices beginning in a month or so.

But one other thing about elasticity: even if Trump manages to get his head out of his ass long enough to think up some bullshit story about how he won The Great Patriotic Trade War, shit doesn't just suddenly get put right, and we're back to normal overnight.

First, other countries in the world - some we call "friend" - have been itchin' for a chance to fuck us over for a very long time. New trade deals that exclude the US are being worked out right now, and there's more than a fair probability that the rest of the world takes this opportunity to hedge their bets and not "get back to normal" - not when the US can so easily become unreliable.

Second, Capitalism leans pretty heavily on the notion of "scarcity" to keep their prices high in order to maximize shareholder value. There's a whole big bunch of companies creaming their jeans over the prospect of milking this problem for every nickel they can squeeze out of it, and plenty of them will never go "back to normal" because they're learning that lots of us will just sit here and take it. So don't expect prices to go back down once this shit is over - because they're going to find a way to keep us hangin' for as long as they can.

That About Covers It

Americans didn’t vote for less stuff that costs more

Trump is wrong to say he has buy-in for transforming the world’s biggest economy.

President Donald Trump seems to be in denial about the unpopularity of his trade wars. On what he intended as a victory lap to coincide with the 100th day of his second term, he repeatedly attacked pollsters as “crooked people” who put out “fake polls.”

At a rally in Michigan on Tuesday, Trump claimed his approval rating was “in the 60s or 70s.” A Washington Post-ABC News-Ipsos poll puts it at 39 percent. This is the same share of American adults as approve of his handling of the economy. And nearly two-thirds, 64 percent, oppose Trump’s tariffs on imported goods.

These numbers are consistent across several recent public surveys. This led to one of the more awkward moments of the past week. During a live interview Tuesday, Fox News correspondent John Roberts asked Stephen Miller, a White House deputy chief of staff, about his network’s polling. “Particularly on the economy, tariffs and inflation, he’s well underwater,” Roberts said of Trump. To which Miller responded: “It is our opinion that Fox News needs to fire its pollster. … We don’t acknowledge any of that polling.”

In another interview Tuesday, Terry Moran of ABC News asked Trump about economists warning that his trade war with China will cost the typical American family thousands of dollars a year. The correspondent said many who voted for Trump fear the fallout. Trump replied: “Well, they did sign up for it, actually. And this is what I campaigned on.” Then he insisted that China will “eat those tariffs” rather than raise prices. This is unimaginable.

During a Cabinet meeting Wednesday, Trump seemed a little more willing to acknowledge that a protracted trade fight with China will force consumers to adjust their behavior. “Maybe the children will have two dolls instead of 30 dolls,” he said. “And maybe the two dolls will cost a couple bucks more than they would normally.”

This sounded like Trump’s “malaise” moment. In 1979, President Jimmy Carter delivered a notorious address from the Oval Office that was similarly motivated by a lamentation of U.S. dependence on foreign imports. In Carter’s case, though, the import was oil. “We can’t go on consuming 40 percent more energy than we produce,” he said. Americans didn’t want to wear cardigans or lower their thermostats. Outside wartime, calling for austerity has rarely been a winning political message.

Trump’s assumption, for decades, has been that Americans can have it all. During the rally Tuesday, he promised to make the country wealthy again. Yet here he was acknowledging to his Cabinet that Americans might need to pay more money for less stuff.

The president is right to say that he campaigned on imposing tariffs. At his rallies, he extolled the beauty of the T-word. Yet many of his voters did not think they were voting to end the era of consumerism. This has become a refrain from his administration. As Treasury Secretary Scott Bessent said in March, “Access to cheap goods is not the essence of the American Dream.”

Yes, Americans still want to put inexpensive Barbies, G.I. Joes and Disney dolls under their Christmas trees. But the United States depends on Chinese imports for far more than cheap toys.

Even a slight majority of Republicans, 51 percent, say they think Trump’s economic policies will cause an economic recession in the short term, even as they overwhelmingly continue to support him, according to the Post-ABC-Ipsos poll. Asked whether Trump’s policies will put the U.S. economy on a stronger foundation in the long run, only 31 percent of Americans said yes; 42 percent said they will leave us weaker, and 22 percent said it’s too soon to say.

Trump said Friday on social media that the economy is going through a “transition stage.” He’s blaming his predecessor and urging patience. So far, the U.S. economy has proved quite resilient, even as businesses pause investment decisions while they wait for some certainty about what’s ahead. Though the labor market cooled last month, the government said Friday that employers still added 177,000 jobs. And though the U.S. economy shrank for the first time in three years during the first quarter, annualized gross domestic product contracted by just 0.3 percent.

A central challenge for Trump’s project is that he still has not secured buy-in to fundamentally transform the world’s biggest economy, let alone to decouple from China, the world’s second-largest economy. A resolution disapproving Trump’s “Liberation Day” tariffs failed in the Senate on Wednesday with only 49 votes but would have passed had two senators not been absent. Sen. Rand Paul (R-Kentucky), who deserves credit for defending Congress’s constitutional prerogative, said afterward that many GOP senators privately dislike the tariffs and will start speaking out if the economy continues to weaken. They hope Trump cleans up the mess first.

With luck, this might still be possible. China signaled a new willingness Friday to start talks with the United States. Container ships that carry goods from China take about a month to cross the Pacific. Trump can get them moving again if both sides come to the table.

Today's Belle

Farmers prefer to earn their money from the markets.

History

History teaches the lessons, and lets us retake the test as often as we want.

Farmer Lady

Facts don't give a fuck about your feelings - markets do.

Return To Sender

China is sending 2 planes back - which will cost Boeing an extra $70M each (tariffs).

And they're canceling orders for maybe another 50.

At $55M per airplane, that's $2.5B in lost revenue - money that was all but in the fucking bag.

This is a total unforced error - an own goal - shooting yourself in the foot.

China sends Boeing planes back to US over tariffs

China has sent back planes it ordered from the US in its latest retaliation over Trump tariffs, the boss of aircraft maker Boeing has said.

Kelly Ortberg said two planes had already been returned and another would follow after trade tensions between the two countries escalated.

Boeing's chief executive told CNBC that 50 more planes were due to go to China this year but their customers had indicated they will not take delivery of them.

The US put 145% tariffs on imports from China and it hit back with a 125% tax on US products.

Speaking in the Oval Office on Tuesday, Trump said he was optimistic about improving trade relations with China, saying the level of tariffs he had imposed would "come down substantially, but it won't be zero".

However, Mr Ortberg said China "have in fact stopped taking delivery of aircraft because of tariff environment".

Boeing is America's largest exporter with about 70% of its commercial aircraft sales outside of the US.

Mr Ortberg said Boeing was assessing options to re-market 41 of the already built planes to other customers as there was high demand from other airlines.

He said there were nine planes not yet in Boeing's production system and he wanted to "understand their intentions and if necessary we can assign to other customers".

He added Boeing was "not going continue to build aircraft for customers who will not take them".

Boeing in daily talks with Trump's team

Later in the afternoon, Mr Ortberg told an investor call "there is not a day that goes by that we're not engaged with either cabinet secretaries or either POTUS himself (President Trump) regarding the trade war between China and the USA."

He added he was "very hopeful we'll get to some negotiations".

On Wednesday, America's Treasury Secretary Scott Bessent told the International Monetary Fund (IMF) conference there was an opportunity for a "big deal" between the US and China on trade.

Asked about an upcoming meeting between the countries, Bessent said it would be an "incredible opportunity" to strike an agreement, if China was "serious" on making its economy less dependent on manufacturing exports.

Mr Ortberg also told investors others in the Boeing supply chain were now exposed to tariffs - mainly in Japan and Italy where universal tariffs of 10% are being implemented.

Brian West, Boeing's chief financial officer said during the call "free trade policy is very important to us" and Boeing will continue to work to with suppliers to ensure continuity.

Boeing has reported smaller losses for the first quarter of the year after it manufactured and delivered more planes.

Production had slumped in 2024 due to a series of crises and a strike by about 30,000 American factory workers.

It wants to increase output of its 737 MAX jets to 38 a month in 2025.

Everything Trump touches

turns to shit

Pod Save America

On Trump's fucked up flip-floppy trade "policies".

Auctioning access

Polling

DOGE

etc

Don't Hold Your Breath

Good deals on international trade don't get done in a hurry. They don't take a few months and half a dozen phone calls. They can take a decade or more.

"... a grossly optimistic timeframe."

It Won't Get Better

Near the end of this piece, Steven Rattner hits the mark by identifying the problems of income & wealth disparity, and the long slide from middle class prosperity into stagnation.

But he fails to fully acknowledge that the causes lie, in large part, with short-sighted corporate policies, and the lopsided advantages handed to big companies and their management teams.

None of this gets better until we burn a few CEOs at the stake.

    IF WE TAX THE RICH NOW

WE WON'T HAVE TO EAT THEM LATER

Everything's Awesome

A nice little five-fecta.

Tech 'Armageddon': One of biggest AI bulls says tariffs will be the end of Wall Street's hottest trade

"The economic pain that will be brought by these tariffs are hard to describe and can essentially take the US tech industry back a decade," Dan Ives said.

US stock futures tumble after China hits back at Trump's tariffs

Stock futures tumbled again on Friday after China said it would impose a 34% tariff on US imports, while European markets continued to slide.

Stocks are cratering after tariffs. Here's what's next for markets.

Stocks plummeted on Thursday in reaction to a widening global trade war. With few parallels in history, markets are wondering where things go from here.

Oil prices are crashing after tariffs and OPEC deliver a double whammy to energy markets

As president Trump's latest tariffs weigh on growth outlooks, OPEC+ members unveiled plans for an output boost that outpaced expectations.

Is Trump purposely trying to trigger a recession?

Is the trade war Trump's strategy to bring down interest rates?

Just Couldn't Stay Away

The Double Whammy

It can be hard to get with a program of punishment when you've spent a long time trying to train yourself not to rely on force.

But sometimes, with some people, literally all you can do is either give up and hand over your lunch money, or you can take your best shot and kick 'em in the stomach. They're not going to listen to you when they're all hunched over groaning, but even once the pain subsides, the memory of the unpleasantness remains, and then you have a chance to talk sense to them.

And actually, Keith Kellogg (Trump's Special Envoy To Ukraine) gave us a great bit of insight into how these authoritarian brains "work".

A few days ago, Trump announced that we would no longer be supplying intel to Kyiv - the kind of information that the Ukrainians have been using to anticipate Russian attacks - and very shortly after that announcement Russia launched missile attacks against Ukrainian cities that were unable to prepare.

Kellogg articulated thusly, "The best way I can describe it is sort of like hitting a mule with a 2x4 across the nose - you got their attention."

Zelenskyy - a man who's been a good friend to us - didn't kowtow to Trump, so he had to be punished - Ukrainian civilians had to be killed so Trump could make his point.

It sucks, but that's the brand of bullying bullshit we're dealing with. So be it.

I'm not the least bit happy about having to take the hits that are coming, but this is what we've got now. This stupid fuck in the White House - and the asshole plutocrats in charge of our national policy - this is what we have to fight to change.

In the meantime -

Stay with it, Canadians

🇺🇸 ❤️ 🇨🇦

The Trade War Escalates

About Those Tariffs

On products and materials we import from Mexico and Canada:

• Cars & Parts
• Electrical & Electronics
• Machinery & Boilers
• Dirty fuels
• Pharmaceuticals
• Opticals, Photographic, Medical Equipment
• Furniture & pre-fab buildings
• Beverages & Vinegars
• Fruits, Nuts, & Veggies
• Fats & Oils
• Fertilizers, meats, other farm/farming products
• Plastics
• Iron & Steel
• Precious metals & gems
• Rubber
• Cereal grains & flour
• Paper products
• Aircraft & Spacecraft
• Aluminum
• Lumber & wood products

Add them all up, and you've got almost $732 billion worth of imported goods from just those 2 countries.

Multiply that by .25 (25% tariffs), and that's $183 billion in additional cost to American consumers (not including the "downstream" costs like packaging and packing materials, added costs for housing and transportation, and the rise in prices just in case things get even worse, and let's face it, this Donald fucking Trump we're talking about here - things will get worse).

Divide that $183 billion by 127 million households, and we all get to pay $1440 more than what we're paying now, plus whatever extra we'll have to pay for everything because of the inflation caused by something as fucking stupid as Trump's tariffs.

Wanna talk about the stuff we import from China?