Ok, it is clear what happened in the October trade data
Imports of pharma collapsed, bring the pharma trade deficit WAY down (reversing the q1 front running); exports of gold soared, generating a big gold surplus
1/ **
Net all the pharma noise out and imports remain flattish (up a bit in October v September) at a high level and exports are more or less flat too – maybe there is a tiny upward trend since May but it is tiny
2/ **
The no pharma or gold trade deficit is down a bit v 2025 (there was a bit of front running in other categories too – see Jan v March) but actually up a bit v September
3/ **
If the administration wanted to make a serious case that adjustment has started, they can show a down trend ex pharma and gold (pharma will still be up for the year tho, impactin…
Ok, it is clear what happened in the October trade data
Imports of pharma collapsed, bring the pharma trade deficit WAY down (reversing the q1 front running); exports of gold soared, generating a big gold surplus
1/ **
Net all the pharma noise out and imports remain flattish (up a bit in October v September) at a high level and exports are more or less flat too – maybe there is a tiny upward trend since May but it is tiny
2/ **
The no pharma or gold trade deficit is down a bit v 2025 (there was a bit of front running in other categories too – see Jan v March) but actually up a bit v September
3/ **
If the administration wanted to make a serious case that adjustment has started, they can show a down trend ex pharma and gold (pharma will still be up for the year tho, impacting the overall number) – 2025 will likely be close to 2024 (peak in q1)
4/ **
Auto imports remain weak (alas so it auto demand, there isn’t a domestic auto boom) b/c of the tariffs (adjustment) –
I was expecting capital goods imports to rise in October on the AI investment boom/ more chip imports but it wasn’t in the data. Expect it in November 5/ **
Bottom line – analysis of the US trade data right now requires a pharma and a gold (and probably an "all precious metals") adjustment
6/6 **
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