International Trade News

China’s devaluation of the yuan may not kick off a currency war around the world, but it’s already triggered similar moves in Asia, and that’s potentially great news for U.S. retailers, the dominant importers of U.S. containerized products such as apparel, footwear and furniture.

Sue Abt artwork
When China devalued its currency in mid-August after a 10-year run-up against the dollar, the People’s Bank of China described the move as a natural step toward the creation of a market dominated Chinese exchange rate. No one in the market — not importers, exporters, manufacturers, investors or analysts — bought the message. Global stocks and commodity markets sold off at an astonishing rate, triggered by fears that China could launch a prolonged currency war that would boost its own exports at the expense of those it buys from, including the U.S.

A plummeting stock market and the devaluation of the yuan have knocked China down a peg, but the Asian manufacturing powerhouse will still grow its trade with the world more than 5 percent annually over the next five years, according to a recent IHS forecast.

Plummeting U.S. exports of recycled paper contributed to a 5.2 percent decline in overall U.S. exports during the first half of 2015, as lower-value commodities were hit by weak demand, a strong dollar and the lingering impact of West Coast port delays.

Containerized exports of poultry through U.S. ports plunged 20 percent during the first half of 2015 because of a multistate outbreak of highly pathogenic avian influenza.

China’s currency has now fallen 3.5 percent in two days after the central bank on Tuesday triggered the yuan’s greatest one-day decline in 20 years, and it is expected to fall further as the country struggles to reverse a sharp drop in trade recorded in July.

California’s export trade declined 4.2 percent in June, as weakness in key markets such as China, Japan, the European Union and Latin America and a strong dollar weighed down sales of manufactured and non-manufactured goods.

U.S. scrap metal exports took a tumble in the first half of 2015 and are expected to fall even more by year’s end, as the strong U.S. dollar continues to weigh on all American exports.

Trade ministers failed to cinch up a deal between a dozen Pacific Rim nations Friday, what could have been their last chance to negotiate the terms of a Trans-Pacific Partnership before the end of the year.