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Trade statistics in June again were buffeted by tariff policy shifts, with the latest deadline for tariff agreements now set for August 7. Trade levels consequently have been affected more by timing decisions attempting to beat the latest deadlines rather than pure economic considerations. For example, the dramatic shift in imports between the first and second quarters was more a redistribution of when those imports took place rather than a shift in the overall levels. This factor continued in June, when nationally the goods and services trade deficit fell 16.0% as exports eased more slowly (-0.5%) than imports
(-3.7%). With the number of trade agreements ramping up, a level of certainty if not yet stability is beginning to enter the trade picture, but the outcome of this week’s latest deadline along with other recent moves such as the announced intention to impose secondary tariffs related to Russia will shed more light on expected trade levels during what would normally be the holiday shipping peaks. The trade uncertainty, however, has yet to have substantial effects on the economy including jobs and prices, particularly as many companies to date have absorbed much of the resulting costs and as reshoring investments
in many cases remain premature given this continuing uncertain investment climate. As additional agreements are completed and the longer-term cost picture becomes more apparent, both of these outcomes are likely to change, with some additional tariff costs passed onto customers and investments again being assessed with at least this source of risk narrowed.
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