Global Trade Limps Along as U.S.-China Tariffs Sow Uncertainty

(Bloomberg) --

Global trade languished for a seventh straight month in May, new figures show, as a tariff battle between the U.S. and China heighten uncertainty that’s slowing growth in Europe and elsewhere in Asia.

Figures published Thursday show trade was flat in the three months through May, compared with the previous three-month stretch, after six consecutive months of declines using that measure. The overall index stood at 124.5 in May, a 0.3% rise from a month earlier, when it fell 0.6%. The latest reading was 0.4% lower than in May 2018.

The CPB World Trade Monitor by the Dutch Bureau for Economic Policy Analysis typically shows month-over-month figures that bounce around, so monitoring the numbers using three-month average smooths out some of the volatility.

For the first time, according to the release, the monthly data include separate trade and industrial production numbers for China. A gauge of Chinese imports in May dropped to the lowest of the year.

The U.S.-China trade war was clouded with uncertainty throughout May, until President Donald Trump and Chinese leader Xi Jinping met in Osaka, Japan, late in the month and agreed not to escalate their eye-for-an-eye tariffs while negotiations resume.

Earlier this week, the International Monetary Fund further reduced its global growth outlook, already the lowest since the financial crisis, and suggested that policy missteps on issues such as trade could derail a projected rebound. The IMF also slashed expectations for growth in the global volume of trade in goods and services, reducing its estimate by 0.9 point to 2.5% in 2019.

--With assistance from Alex Tanzi and Fergal O'Brien.

To contact the reporter on this story: Brendan Murray in London at brmurray@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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