Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers.

As of July, the US trade deficit was running worse than a year ago, despite improvement earlier in 2018. A new Census report today suggests: (1) further deterioration of the trade balance in August, and (2) a role for exports of food & feeds which, after rising in the spring, have apparently fallen sharply since June: -6.3 % in July and -9.5 % in August. [Advance Economic Indicators, Sept. 27, 2018, Table 1. U.S. Intl. Trade by End-Use Category]. This is consistent with the story that retaliatory Chinese tariffs against US exports of soybeans and other farm products caused shipments to be moved forward to beat the July 1 deadline.

But the overall trend in the US trade balance appears to be negative. This is not surprising in light of the recent appreciation of the dollar (not just against the RMB but against most currencies), which can in turn be attributed to Trump’s own tax cuts and other policies. CA=NS-I. Watch for trade balance statistics Oct. 5. We are nearing the all-time US record (2008).

This post written by Jeffrey Frankel.