Tariffs start to show up

21 Mar 2025 2 min read

Daily update

  • South Korean export data for early March recovered from lunar new year distortions. Export strength was led by ships and chips—more-consumer-oriented sectors were not so robust. The data is a positive signal for Korea, but does not perhaps say much about global demand as trade taxes increase.
  • Media are reporting US job losses from US President Trump’s trade taxes. Given political polarization, in some cases tariffs may be a convenient excuse for planned job cuts. However, low fear of unemployment supported economic strength over the past four years. If uncertainty starts to create fear of unemployment, a more significant downside risk to US growth will emerge.
  • Japan’s February consumer price data slowed, but the headline rate slowed a little less than expected. The internationally defined core figure was stable, and private sector service prices are low (signaling muted underlying price pressures, perhaps).
  • Bank of England Governor Bailey suggested the outlook was uncertain. For international readers, that is British understatement (the economic equivalent of saying “missing the teatime alarm would be unfortunate”). The ONS announced it will suspend publishing producer price data, because the data is dodgy. If economists’ forecasts disagree with data, there is a good chance it is the data (not the economists) that is wrong.
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