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48 posts on "Exports"

April 18, 2017

Why Renegotiating NAFTA Could Disrupt Supply Chains



LSE_Why Renegotiating NAFTA Could Disrupt Supply Chains

Supply chains have become increasingly interlinked across the U.S.-Mexico border. The North American Free Trade Agreement (NAFTA), allowing tariff-free commerce between the United States, Canada, and Mexico, has facilitated this integration. Some critics of NAFTA are concerned about the bilateral trade deficit and have proposed stricter rules of origin (ROO), which would make it more cumbersome for firms to access the zero tariff rates they are entitled to with NAFTA. We argue that measures that make it costlier for U.S. firms to import will also hurt U.S. exports because much of U.S.-Mexican trade is part of global supply chains.

Continue reading "Why Renegotiating NAFTA Could Disrupt Supply Chains" »

Posted by Blog Author at 7:00 AM in Exports, International Economics | Permalink | Comments (0)

April 17, 2017

U.S. Exporters Could Face High Tariffs without NAFTA



LSE_U.S. Exporters Could Face High Tariffs without NAFTA

An underappreciated benefit of the North American Free Trade Agreement (NAFTA) is the protection it offers U.S. exporters from extreme tariff uncertainty in Mexico. U.S. exporters have not only gained greater tariff preferences under NAFTA than Mexican exporters gained in the United States, they have also been exempt from potential tariff hikes facing other exporters. Mexico’s bound tariff rates—the maximum tariff rate a World Trade Organization (WTO) member can impose—are very high and far exceed U.S. bound rates. Without NAFTA, there is a risk that tariffs on U.S. exports to Mexico could reach their bound rates, which average 35 percent. In contrast, U.S. bound rates average only 4 percent. At the very least, U.S. exporters would be subject to a higher level of policy uncertainty without the trade agreement.

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Posted by Blog Author at 7:00 AM in Exports, International Economics | Permalink | Comments (0)

April 12, 2017

The End of China’s Export Juggernaut



LSE_The End of China’s Export Juggernaut

China has been an exporting juggernaut for decades. In the United States, this has meant a dramatic increase in China’s share of imports and a ballooning bilateral trade deficit. Gaining sales in the United States at the expense of other countries, Chinese goods rose from only 2 percent of U.S. non-oil imports in 1990 to 8 percent in 2000 and 17 percent in 2010. But these steady gains in U.S. import share have stopped in recent years, with China even losing ground to other countries in some categories of goods. One explanation for this shift is that Chinese firms now have to directly compete against manufacturers in high-skill developed countries while also fending off competition from lower-wage countries, such as Vietnam. This inability to make additional gains at the expense of other countries means that exports don’t contribute as much to China’s overall growth as they used to.

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Posted by Blog Author at 7:00 AM in Exports, International Economics | Permalink | Comments (1)

June 01, 2016

Revisiting the Case for International Policy Coordination

Sushant Acharya, Ozge Akinci, Julien Bengui, and Bianca De Paoli

LSE_Revisiting the Case for International Policy Coordination

Prompted by the U.S. financial crisis and subsequent global recession, policymakers in advanced economies slashed interest rates dramatically, hitting the zero lower bound (ZLB), and then implemented unconventional policies such as large-scale asset purchases. In emerging economies, however, the policy response was more subdued since they were less affected by the financial crisis. As a result, capital flows from advanced to emerging economies increased markedly in response to widening interest rate differentials. Some emerging economies reacted by adopting measures to slow down capital inflows, acting under the presumption that these flows were harmful. This type of policy response has reignited the debate over how to moderate international spillovers.

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May 19, 2016

Just Released: Presenting U.S. Economy in a Snapshot at Our Economic Press Briefing



LSE_Just Released: Presenting U.S. Economy in a Snapshot at Our Economic Press Briefing


Monitoring the economic and financial landscape is a difficult task. Part of the challenge stems from simply having access to data. Even if this requirement is met, there is the issue of identifying the key economic data releases and financial variables to focus on among the vast number of available series. It is also critical to be able to interpret movements in the data and to know their implications for the economy. Since last June, New York Fed research economists have been helping on this front, by producing U.S. Economy in a Snapshot, a series of charts and commentary capturing important economic and financial developments. At today’s Economic Press Briefing, we took reporters covering the Federal Reserve through the story of how and why the Snapshot is produced, and how it can be helpful in understanding the U.S. economy.

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Posted by Blog Author at 10:30 AM in Exports, Macroecon, Monetary Policy | Permalink | Comments (0)

May 09, 2016

The Turnaround in Private and Public Financial Outflows from China



LSE_2016_china-reserves_klitgaard_460_art

China lends to the rest of the world because it saves much more than it needs to fund its high level of physical investment spending. For years, the public sector accounted for this lending through the Chinese central bank’s purchase of foreign assets, but this changed in 2015. The country still had substantial net financial outflows, but unlike in previous years, more private money was pouring out of China than was flowing in. This shift in private sector behavior forced the central bank to sell foreign assets so that the sum of net private and public outflows would equal the saving surplus at prevailing exchange rates. Explanations for this turnaround by private investors include lower returns on domestic investment spending and a less optimistic outlook for China’s currency.


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May 02, 2016

Lower Oil Prices and U.S. Economic Activity



Lower Oil Prices and U.S. Economic Activity

After a period of stability, oil prices started to decline in mid-2015, and this downward trend continued into early 2016. As we noted in an earlier post, it is important to assess whether these price declines reflect demand shocks or supply shocks, since the two types of shocks have different implications for the U.S. economic outlook. In this post, we again use correlations of weekly oil price changes with a broad array of financial variables to quantify the drivers of oil price movements, finding that the decline since mid-2015 is due to a mix of weaker demand and increased supply. Given strong interest in the drivers of oil prices, the oil price decomposition is information we will be sharing in a new Oil Price Dynamics Report on our public website each Monday starting today. We conclude this post using another model that finds that the higher oil supply boosted U.S. economic activity in 2015, though this impact is expected to wear off in 2016.

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January 15, 2016

Crisis Chronicles: The Gold Panic of 1869, America’s First Black Friday



LSE_2016_cc-panic-1869_morgan_460_art

Wall Street in the late 1860s was a bare-knuckles affair plagued by robber barons, political patronage, and stock manipulation. In perhaps the most scandalous instance of manipulation ever, a cabal led by Jay Gould, a successful but ruthless railroad executive and speculator, and several highly placed political contacts, conspired to corner the gold market. Although ultimately foiled, they succeeded in bankrupting several venerable brokerage houses and crashing the stock market, causing America’s first Black Friday.

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November 20, 2015

Crisis Chronicles: The Cotton Famine of 1862-63 and the U.S. One-Dollar Note



LSE_2015_cc-british-cotton-famine_460_art

When the U.S. Civil War broke out in 1861, cotton was king. The southern United States produced and exported much of the world’s cotton, England was a major textile producer, and cotton textiles were exported from England around the world. At the time, many around the world depended on cotton for their livelihood. The South believed this so deeply that when the North blocked Southern ports to cut off the South’s primary means of financing war—cotton sales—Southern leaders were sure that Britain would enter the war on their side. That never happened. So when cotton supplies dried up in late 1862, thousands in Manchester and Lancashire who either directly or indirectly depended on cotton for a living found themselves without work. In this post, we describe the British cotton famine of 1862-63 and the stoic British national response. We draw primarily from a fascinating BBC Radio broadcast on the subject and John Watts’ matter-of-factly named Facts of the Cotton Famine, published in 1866.

Continue reading "Crisis Chronicles: The Cotton Famine of 1862-63 and the U.S. One-Dollar Note" »

Posted by Blog Author at 7:00 AM in Crisis Chronicles , Economic History, Exports | Permalink | Comments (0)

October 16, 2015

Just Released: Regional Service Sector Resilient even as Manufacturing Slumps



LSE_2015_jr-bls-october_460_art

The October 2015 Business Leaders Survey of regional service firms, released today, paints a considerably more benign picture of local business conditions than the more troubling October 2015 Empire State Manufacturing Survey, released yesterday. The two surveys point to diverging trends in the regional economy: manufacturing firms report that business activity has weakened, on balance, for the third month in a row, while regional service firms, though far from euphoric, remain slightly positive, on balance, about business trends. One of the reasons for this divergence seems to be the strong dollar, which has had negative effects on far more manufacturers than service firms, according to our surveys.

Continue reading "Just Released: Regional Service Sector Resilient even as Manufacturing Slumps" »

Posted by Blog Author at 8:45 AM in Exchange Rates, Exports, Macroecon, Regional Analysis | Permalink | Comments (0)
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