Decoupling or Redirected There is much academic debate over whether U.S.- China trade has been decoupled, or merely redirected with Chinese goods diverted through other countries such as Mexico and Thailand. Part of the problem is using correlation to assume causation. Researchers at Penn State (NBER Working Paper 31922) conclude that it is more complex. There is some diversion but they found that comparative advantage is at play more than the tariffs that Washington imposed on China. They also found that capital intensive goods were more adversely impacted than more agile products, and that countries that have increased their exports to the U.S. have concurrently increased their sales to other countries. Meanwhile, China has begun...
Key Market Insights The broad market is locked in on this week’s Trump-Xi meeting in Beijing, but this is no longer just a trade summit. Increasingly, the meeting is becoming tied directly to Iran, energy security, and the growing global economic fallout from disruptions through the Strai...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.