JAKARTA (TheInsiderStories) – Cooling tension on trade war appeared, when United States (US) President Donald Trump said he would meet Chinese President Xi Jinping late June at the G20 Summit in Japan. The higher tension between the world’ largest economies, sending shivers through global markets.
China on Monday (05/06), announced higher tariffs on US goods worth $60 billion, in effect on June 1, in response to a US decision on Friday to raise levies on Chinese imports worth $200 billion.
Yesterday, President Xi revealed his country would only be more open to the world when no country claimed to have cultural superiority, in his first public speech since tensions with the US increased last week.
China was very upset with comments reported in US media last month by a State Department official who said the US was involved in “very different civilizations” fighting with China.
The world hoped that the two leaders with different protectionist and ideologies strategies will soon cool down and are expected to improve again.
According to the Federal Reserves (Fed), US economy showed a slowdown amid a re-tense trade war with China. The slowdown was seen in the decline in manufacturing industrial production and retail sales during April 2019.
The Fed reported that US industrial output in April fell 0.5 percent from the previous month, defying market expectations from a flat reading and reversing a 0.2 percent increase in March. That was the biggest decline in industrial production since May last year.
This decline occurs after an average decline of about 0.4 percent per month, for the previous three months, said the central bank.
Amid a bitter dispute with China, US pain was reflected in various production sectors, where industrial output in the first quarter fell 1.9 percent over the same period last year, according to the latest data, revised from a decline of only 0.3 percent last reported month.
In April alone, the production of durable goods fell by almost 1.0 percent, although the index for non-durable goods only fell slightly. Among durable goods, a loss of 2 percent or more is posted by the machine; electrical equipment, equipment, and components; and motorized vehicles and their parts.
In addition, among items that cannot be repaired, the results vary – the largest increases are recorded by clothing and paper and products, and the biggest decline is recorded by textile and product manufacturers and by plastic and rubber products.
The index for other manufacturing (issuance and logging) fell 0.3 percent and was well below the level of the previous year.
Utility output also fell 3.5 percent in April, with a decline in the index for natural gas and electricity utilities; demand for heating declined last month due to warmer than usual temperatures.
However, after falling for three consecutive months, mining yields increased 1.6 percent in April and 10.4 percent above the level a year earlier. The increase in the mining index reflected gains in the oil and gas sector as well as a surge in coal mining which followed several months of decline.
Meanwhile, capacity utilization for manufacturing fell 0.5 percentage points to 75.7 percent, a level that is 2.6 percentage points below the long-term average.
In addition to shrinking manufacturing production, US retail trade in April also shrank to 0.2 percent from the previous month, following a revised 1.7 percent growth in March, which was the biggest increase in sales for one and a half years.
“6 of the 13 major retail categories show a month-to-month decline,” said US’ Census Bureau on Wednesday.
Year after year, retail trade growth slowed to 3.1 percent from 3.8 percent in the previous month. Excluding cars, gasoline, building materials and food services, retail sales were flat in April after a 1.1 percent increase in March, it said.
The Bureau reported that receipts at motor vehicle dealers and spare parts dropped 1.1 percent, after a 3.2 percent increase in the previous month and those in building materials stores fell 1.9 percent, reversing a 0.8 percent increase in March.
President Trump has repeatedly touted strong first-quarter growth figures as evidence of economic policy and tough trading tactics to fruition. However, US economists have long warned that the data includes unsettling signs that could indicate an impending slowdown, mainly due to short-term explosions of 2017 fading tax cuts and higher tariffs biting rates.
Written by Daniel Deha, Email: email@example.com