Aggregate Demand and Supply

Evidence of price gouging - with firms taking advantage of an inflationary environment to boost profits. Who would have thought it?

Certainly Robert Reich thinks that stubborn inflation in the US might be related to record levels of corporate profit earned in the fourth quarter of 2023. He argues that many industries are more concentrated than ever, and firms able to exploit their market power, and act against consumers' interests.  

They'll be suggesting it could be happening in the UK, next. Remind me, what were Tesco's profits last year?

Economic gold - and a great way to pass half an hour. The Guardian's audio long read about the impact of the beef industry on the US, and how it's changed is one for the cognoscenti but it's a fascinating insight into lots of aspects of microeconomics, and helps explain the emergence of agribusiness

Mohamed El-Erian highlights, begrudgingly, the length of the US economic recovery but wonders whether it's all 'smoke and mirrors' and conceals structural weaknesses that might worsen the next downturn, not least because of "the lack of policy space".

It's an interesting article, and the phrase I've citied should be something that might prompt you to think about what the author means.  

Undoubtedly the most interesting of today's article on the ongoing trade war - are we on the brink of a tech-led Cold War?

Damned if you do, and damned if you don't. President Trump must be confused by the fact that growth of over 3% - above the trend rate - isn't in receipt of praise. 

However, despite the headline rate of growth being high, there are concerns that there are underlying factors might account for much of the growth, and that the underlying rate of growth is more disappointing. Either way, the Federal Reserve have some decisions to make.   

Such are the complexities of international trade - Congress want President Trump to strike a tough deal with the Chinese, rather than accept any deal. 

It sounds familiar, doesn't it...?

Trade wars: easy to win. At least, that's what President Trump is claiming, with the news that Chinese economic growth is slowing and, he believes, that this will see the Chinese keener to strike a trade deal in forthcoming trade talks. 

A 'fluffy' magazine-style piece on this weekends G20 meeting in Buenos Aires and what it means for the ongoing US-China trade war.

Simple answer, to a simple question.

Refuting the claims of a self-evidently simple man.

Correct your economic maps - NAFTA is the United States-Mexico-Canada Agreement (USMCA). Catchy acronym!

Is President Trump a stable genius after all - this deal didn't seem likely and apparently hinges on the US getting more access to the Canadian diary market and restricting Canadian car exports to the US.

Is the President's attitude to trade negotiations that of the man driving a hard bargain with a street trader - you barter like mad, and if they finally accept, then the trade is mutually agreeable? And at what point does this become bullying.

It's almost beyond comment: the Chinese trade surplus with the US reached a record high last month, but is likely to fall as tariffs take effect.

And who's going to gain from this? Very, very few people.  

And so it goes - to quote the great Kurt Vonnegut - Harley Davidson appear to be on the point of looking to move some manufacturing outside of the United States in response to the EU retaliatory tariffs. 

Easy to win, apparently.

US inflation remains problematically high, and has actually gone up over the last month, driven by fuel and housing costs. As a result, the Fed are likely to be more reluctant to lower interest rates and this has implications for the conduct of monetary policy everywhere. 

Jeffrey Frankel looks at the US recovery in a global context, pointing out that it's not a world record but pretty impressive nonetheless.

However, he also wonders whether the US is already entering a recession. I suspect that this is little bit wishful. 

And here's the rhetoric getting in the way of the economics.

The fact that President Trump mentions Huawei in this context somewhat invalidates the 'national security' arguments that have been advanced so far. It seems as though Huawei is a 'test case' to see how much China is prepared to compromise to allow one of its largest, and well-known, firms access to global markets.

Nouriel Roubini on the ongoing US-China trade war. I wonder if my friend Mr.Eames has been responsible for editing this...?

All part of the Trumponomics 'economic miracle'.

Good luck in winning the 2020 election if growth slows, my friend.

Trade talks continue with the 1 March deadline looming: are the US and China going to be able to reach some accommodation?

Watch this space.

Karishma Vaswani focuses on the notion that the US and China re nearing agreement on how to end their trade dispute, arguing that any deal is unlikely because of three apparent irreconcilable issues: intellectual property rights, market access and the 'Made in China 2025' campaign that looks at developing Chinese competitors in high tech sectors, like aviation and superconductors. 

On this basis alone, she sees complete agreement as highly unlikely at the moment. Let's see if she's right. 

More international trade news: with the boss of the WTO calling the present situation the "Worst crisis in trading system since 1947".

Have we really stooped so low? The answer may well be "Yes", on many fronts.

They say that you should be careful what you wish for: in President Trump's case this seems to be the case. 

GM have announced that they are going to make nearly 15,000 people redundant at five of their American plants, and have had the temerity to suggest that the President's trade policy have had something to do with this. And they have a point - tariffs have increased the company's component costs by around $1 billion, but changing market conditions have also played a part. 

The President is reputed to be furious - but then again, he's hardly the epitome of a successful businessman - and if he had his way he'd probably try and appoint Carlos Ghosn to replace the current CEO Mary Barra

Will the latest North American trade deal help resolve the US trade deficit. This article looks at the new NAFTA and its special provisions that might make a difference.

However, is protectionism the solution - it appears not: the Congressional Research Service has suggested that  "The Trump Administration's approach contrasts with the views of most economists, who argue that the overall US trade deficit stems from US macroeconomic policies that create a savings and investment imbalance in which domestic sources of capital are not sufficient to meet domestic capital demands." 

Really interesting little footnote to all the ongoing trade dispute material out there; as yet there doesn't seem to have been that much of an effect upon export values. However, think about this - isn't it an application of the J-curve - in that any reaction of export/import volumes is likely to be long-term because of the inelasticity of demand for exports and imports. 

But will there be a reaction in the longer term? We shall see. 

Just an ace clip!

Why should you care about a US-China trade war? This BBC clip is clear - and I think pitched at the right level for students starting to grapple with the complexities of international trade.