The fear of investors slowing trade has already arrived

The data suggests that synchronized global growth that has supported global markets and corporate profits for much of the year is already starting to turn empty. And this slowdown is expected to have a greater impact on trade than the ongoing conflict in the United States, China and other major economies, according to analysts and investors

"There is a huge correlation between Asian exports and Asian recipes.You can extend this analysis of world trade to global profits, "he said.

Tai Hui,

Chief Market Strategist for Asia at J.P. Morgan Asset Management. Companies in sectors such as consumer electronics are already suffering, he added.

For almost a year, surveys of purchasing managers in the manufacturing sector indicate a decline in international demand. 19659003] The new part of the exports of

JP Morgan
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The global manufacturing PMI fell to 50.5 in June, its weakest in almost two years. The figure remains above 50, indicating that export orders continue to rise, but it has declined each month since its most recent peak at 54.2 in January.

Order data closely reflect annual changes in world trade volumes. The 4.8% rise in world merchandise trade last year – the highest since 2011, according to the World Bank, and representing $ 1.13 trillion in goods traded – should not be repeated.

The trade lost in the global economy of this slowdown will likely grow to hundreds of billions of dollars – overshadowing the value of trade involved in the dispute between the United States and China. US tariffs to set up Friday cover $ 34 billion worth of Chinese goods; China levies retaliatory duties on an equivalent amount of US exports

Tariffs already imposed, such as those imposed by the United States on imports of steel and aluminum, could not have significant impact on most Chinese companies. steel and aluminum companies, most of the exports are actually interregional. This is only 0.1% of the total production capacity that goes even to the United States for Chinese steel mills. Aluminum is only 2%, "said

Catherine Yeung,

The slowdown in global trade better explains the recent massive sales of bonds and equities emerging markets than any fear of growing protectionism, said BCA Research, an independent Canadian research firm, in a report released last week. Any fall in trade should primarily affect the economies that are part of global manufacturing processes, such as those of several emerging Asian countries.

"When world trade develops, the weaker parts of the chain are doing well, conversely, when world trade growth declines, these weak links are the first to break.

Arthur Budaghyan,

Of course, some economists argue that there is a link between the rise in protectionist policies and weak global export data – even though a lot of discussions about tariffs have not yet taken effect

"It may be that companies anticipate that trade will become more difficult with China or with the United States and adjust their supply chains"

Joanna Konings,

Senior economist of international business at ING in Amsterdam.

The last German manufacturing PMI, a major player in global supply chains, gives some weight to this interpretation. Export sales growth has been the weakest for over two years, and a number of companies have reported lower orders from the United States and China.

Even small tariffs can have important effects on business confidence. The imposition of tariffs in a world of integrated multinational supply chains could be self-defeating and likely to pass to US consumers, according to the United States.

Morgan Stanley
.

"If the trade dispute becomes more complicated, if both parties are not willing to change attitude, you could end up with a much more serious disruption," said

William Yuen,

Director of Investments at Invesco.

Write to Mike Bird at [email protected] and Riva Gold at [email protected]