The March trade report will be released on Tuesday at 8:30 AM ET, with a close look at the U.S. trade balance. Here are five things to look for in the report.
1. Decreased imports from China
Imports from China will continue to fall as the two countries attempt to sever their trade ties and navigate an increasingly rocky relationship. While the U.S. has cut off its relations with China, it has compensated for the drop by increasing trade with other countries.
2. Overall trade volume may decrease
As the dollar weakens, economists believe that the U.S. will increase its exports, with a caveat. “In the long run, a weaker dollar may also generate higher costs for foreign-made inputs and intermediate goods, and eventually make the U.S. exports less competitive,” said Wei Liang, an economist and professor at Middlebury Institute of International Studies at Monterey. “Another factor that may support the U.S. exports is the trade deals the White House has negotiated with the U.S. trading partners, often with those countries agreeing to lower their import tariffs for U.S. goods, while the U.S. can manage to keep 15%-20% tariffs for its exports into the U.S. market.”
3. The U.S. will continue to export oil
As oil prices continue to rise globally due to the War in Iran, the U.S. will see growth in its oil exports as countries struggle to meet demand amid blockages in the Strait of Hormuz. Economists agree, however, that war and the oil crisis are inflationary, both domestically and globally, and will drive up the cost of production and disrupt the global supply chain.
4. Trade relationships will continue to change
Bilateral tariff deals and continuing developments will change the U.S.’s trade relations. Exports to allied economies, including the EU, Japan, and Canada, will continue to fall as in recent months, thanks to ongoing tariff wars. While the U.S. has abandoned the World Trade Organization, other countries, led by powers including Canada, Japan, and the EU, have helped maintain the global trading system, which may have a lasting impact on the role that the U.S. will play in the future global economy.
5. War in Iran will eventually slow down economic growth
While imports may have a momentary jump, the trade deficit will continue to grow. The War in Iran is destabilizing global energy markets and intensifying trade tensions, and economists believe that the long-term impact will slow down the U.S. economy and global economic growth.
