Trading around the US

Daily update

US manufacturers live in confusing times. Alongside the widespread increases in taxes on imports that took effect this morning, US President Trump suggested a 100% tax on imports of microchips. However, in a maneuver that was less a retreat and more a pirouette, these taxes will not apply to imports from some specific companies, including some of the largest exporters to the US. That blunts the cost of the tax and tilts this toward spin rather than substance, but increases the paperwork associated with doing business in the US.
China’s July export data showed more strength than had been expected. Non-US exports drove this (although some of those exports may still end up in the US with some careful repackaging—that has been the case in the past). German June exports were also stronger than expected. The rest of the world is trading around US isolationism.
The Bank of England is unanimously expected to cut rates (although the vote is very unlikely to be unanimous). Price changes in the UK seem more about specific peculiarities than a generalized problem.
US productivity and unit labor cost data is volatile, but productivity numbers are not yet showing any sign of a boost from artificial intelligence use (implying limited job losses).