ING analysts suggest that there is little evidence that the US domestic manufacturing is picking up the slack in any meaningful way as the US manufacturing output is down 1.1% year-to-date and 4.4% below the peak levels of December 2007.
Key Quotes
“It is possible that some US manufacturers are receiving orders for some of what was serviced by Chinese imports at a time when demand for US manufactured goods is falling overall. This downturn in itself may be in large part caused by worries over the lingering effects of the trade war.”
“With durable goods orders pointing to a contraction in domestic capital expenditure in coming quarters and the manufacturing ISM in negative territory, there seems little prospect that we will see a near-term build-up in domestic US manufacturing potential.”
“Maybe one solution to the impasse is if China was instead to move some of its production to the US, but this looks highly unlikely to happen in the near-term given the current political stand-off. Despite their respective claims, the US and China look set to both remain losers from the trade war.”
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