The new tax wave

Daily update

US President Trump announced the start of a new wave of taxes on US consumers, with a 25% tax on US citizens who want to buy products from South Korea and Japan. Other countries’ exports also received higher tax rates, but it seems a wasted effort to analyze every Trump social media post when investors understandably anticipate future retreats. Japan and South Korea accounted for around 8.5% of US imports last year, so this tax increase adds 0.1 to 0.2 percentage points to consumer price inflation.
The June US NFIB survey of small businesses is due. Traditionally, this is Republican biased. Republican consumer confidence improved in June. The comparison might be interesting. The New York Fed one-year inflation expectations will be distorted by political polarization.
US consumer credit is not especially noteworthy at the moment, but may become more important. As real incomes start to decline, consumers are likely to use savings and credit to temporarily support spending.
German May trade data is complicated by patterns of trade with the US, making it hard to forecast (so hard, only seven economists attempt it). German trade with the rest of the world continues normally, but the bias to spending on fun in preference to goods does not necessarily work to Germany’s advantage.