UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'The bigger picture on trade'
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Aug 5, 2025 Explore the latest in the US trade balance, focusing on how the June figures reveal the interplay between goods and services. The discussion highlights how trade taxes have distorted export patterns and the impact on bilateral relationships, especially with the EU. There's an intriguing look at how the anticipated tariffs are unlikely to position the US as an export powerhouse. Additionally, investment strategies are evolving as efficiency takes precedence in response to changing market dynamics.
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US Trade Deficit Offsets
- US trade deficits in goods are largely offset by surpluses in services, especially with the EU.
- Including services makes the US deficit appear smaller in trade balance figures.
Distortions in US Goods Trade
- US goods trade has been distorted by stockpiling ahead of tariffs and retaliatory actions.
- Boycotts of US consumer goods contribute to these minor export distortions.
Trade Taxes Fail to Boost Exports
- The US is unlikely to become an export powerhouse due to trade taxes.
- Factory investment booms have faltered amid ongoing policy uncertainty.