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Madhur Jha, Head of Thematic Research at Standard Chartered, suggests that the ongoing trade tensions between the US and China have begun to hurt actual global trade flows, not just sentiment.

Key Quotes

“Global trade volumes, which grew at their fastest pace since the Global Financial Crisis between mid-2017 and mid-2018, started to moderate in Q3-2018. This is before the impact of tit-for-tat trade tariffs really start to make an impact on US-China and global trade.”

“Both advanced and emerging economies are experiencing slower export growth, while import growth is slowing more sharply for advanced economies. The regional breakdown shows a perceptible slowdown in euro-area trade growth, both in terms of imports and exports.”

“Within emerging markets, while export growth has moderated across the board, the slowdown in Asian exports is likely to cause more concern, given its status as the world’s export hub. Import growth is still holding up in these economies, driven by strong domestic demand. However, as export growth slows, this is likely to moderate as well.”

“The US is the main exception to this weaker trade data, witnessing stronger growth in both exports and imports, fuelled by late-cycle fiscal stimulus.”