What's Roiling the Waters of Global Trade

When HSBC Holdings’ global economists recently pooled their forecasts, all had a similar projected source of growth: exports. The impossibility of every nation selling more than it buys means some of the analysts must be wrong—unless the rest of the solar system becomes a source of demand for the globe’s products, Stephen King, HSBC’s chief economist, said at an Oct. 16 conference in London. “Export claims are just far too optimistic,” said King, a former U.K. Treasury official.

The bet on trade is flopping for companies and policymakers who had hoped it would power recoveries held back by weak domestic demand. During the week of Oct. 20, Caterpillar and Unilever said demand from foreign customers was sliding. The CBP Netherlands Bureau for Economic Policy Analysis released a report on Oct. 24 that estimated the volume of global trade fell 0.8 percent in August from a year earlier, the most since February.