U.S. trade price deflation continued to accelerate in June, Panjiva’s analysis of official data shows, with import prices having fallen by 2.03% year per year and exports down by 1.64%. Excluding the volatile food and fuels elements imports fell 1.59% and exports by 0.29%. The import price deflation was the fastest since Jun. 2016’s 1.8%.

Chart segments U.S. trade price inflation by direction and product inclusion. Calculations include Bureau of Labor Statistics figures.  Source: Panjiva

The price deflation has been broad-based with six of the eight regions covered seeing lower year-over-year prices. Among the major manufacturing supply centers ASEAN prices fell the quickest with a 2.3% decline, while prices for imports from China fell 1.5% and those from the EU by 0.3%.

Chart segments U.S. import price inflation by origin. Calculations include Bureau of Labor Statistics figures.  Source: Panjiva

Imports from China have seen an acceleration in deflation since November, suggesting that one driver has been a reduction in prices to offset an increase in tariffs. The increase in duties on “list three” products to 25% from 10% from May – outlined in Panjiva’s research of Jul. 16 – has likely driven the extended deflation.

Evidence for the impact on tariffs on export pricing from China can be seen most starkly in: chemicals where prices dropped for a seventh straight month at an 11.0% year over year rate of deflation; capital goods manufacturing where priced deflation increased for a sixth straight month by 1.5%; furniture where deflation of 0.1% followed 18 straight months of increases.

Chart segments U.S. import price inflation from China by product. Calculations include Bureau of Labor Statistics figures.  Source: Panjiva