1. US Trade Balance Data March 2015
Conclusion
The US trade deficitresumeditsdownwardtrendbecause the decelerationinimportshasbeenmore
than offsetbythe decelerationinexports. Thisoverall dynamic,spurredinpartbyUSD appreciation
and slowingglobal growth,will continue topressure overallUSGDP growth,much as we saw in the last
quarter.
The closingand thenre-openingof the USwestcoast ports impactedChinaandJapanmostly. That said,
overall 1q15 US importswere almostidentical the USimportsineachyear startingin2011 implyinglittle
demandgrowth. We see the same trendin US importsexcludingpetroleum.
Finally,USexportstoChinaare nolongergrowingandthe current rate of change in consistentwiththe
pace seenlastheadingintothe 2008 recession. ExportstoCanadaand Mexico,the twoothersignificant
destinationsforUSexports(inadditiontoChina) are slowing.
Analysis
The overall US trade deficit,fromalevel perspective, hasresumeditsdownwardtrend,even when
includingpetroleumproducts,somethingwe believereflectsoverall globalcurrency,monetaryand
fiscal policyimbalance:

2. Shownina differentway,importsare growingfasterthanexports butbothare deceleratingand
growingat verylowlevelssuggestingslow USandglobal growth:
(1,000,000)
(900,000)
(800,000)
(700,000)
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
12/1/1993
9/1/1994
6/1/1995
3/1/1996
12/1/1996
9/1/1997
6/1/1998
3/1/1999
12/1/1999
9/1/2000
6/1/2001
3/1/2002
12/1/2002
9/1/2003
6/1/2004
3/1/2005
12/1/2005
9/1/2006
6/1/2007
3/1/2008
12/1/2008
9/1/2009
6/1/2010
3/1/2011
12/1/2011
9/1/2012
6/1/2013
3/1/2014
12/1/2014
US Trade Balance, TTM
US Trade Balance, TTM

3. We wouldlike tospendamomentfocusingsolelyonUSimportdata as a proxyfor US internal demand,
particularlyinlightof the re-openingof the US westcoastports. Above,yousaw the veryslow trailing
twelve monthgrowthtrendinUS imports.
Generallyspeaking,USimports,excludingpetroleum,continuetosoftendespite the re-openingof the
WestCoast ports and, quite frankly,have notgrownsince 2011:
-35.0%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0% 12/1/1994
9/1/1995
6/1/1996
3/1/1997
12/1/1997
9/1/1998
6/1/1999
3/1/2000
12/1/2000
9/1/2001
6/1/2002
3/1/2003
12/1/2003
9/1/2004
6/1/2005
3/1/2006
12/1/2006
9/1/2007
6/1/2008
3/1/2009
12/1/2009
9/1/2010
6/1/2011
3/1/2012
12/1/2012
9/1/2013
6/1/2014
3/1/2015
US Imports and Exports, TTM, Y/Y
US Exports, TTM, Y/Y US Imports, TTM, Y/Y

4. The two largestimpactsfromthe westcoast port re-openingwere inChinaandJapan.
US importsfromChinain March 2015 increasedsignificantly:
90
95
100
105
110
115
120
125
12/1/2001
6/1/2002
12/1/2002
6/1/2003
12/1/2003
6/1/2004
12/1/2004
6/1/2005
12/1/2005
6/1/2006
12/1/2006
6/1/2007
12/1/2007
6/1/2008
12/1/2008
6/1/2009
12/1/2009
6/1/2010
12/1/2010
6/1/2011
12/1/2011
6/1/2012
12/1/2012
6/1/2013
12/1/2013
6/1/2014
12/1/2014
US Imports, Excluding Fuel (January 2000 = 100)
US Imports, Excludng Fuel (January 2000 = 1000)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
1/1/1993
12/1/1993
11/1/1994
10/1/1995
9/1/1996
8/1/1997
7/1/1998
6/1/1999
5/1/2000
4/1/2001
3/1/2002
2/1/2003
1/1/2004
12/1/2004
11/1/2005
10/1/2006
9/1/2007
8/1/2008
7/1/2009
6/1/2010
5/1/2011
4/1/2012
3/1/2013
2/1/2014
1/1/2015
US Imports from China, Level Data
US Imports from China, Level Data

5. From a year-over-yearbasis,youcansee thiswiththe blue line below:
Japanalso showed positive impactfromthe re-opening,firstfromalevel data:
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1/1/1993
12/1/1993
11/1/1994
10/1/1995
9/1/1996
8/1/1997
7/1/1998
6/1/1999
5/1/2000
4/1/2001
3/1/2002
2/1/2003
1/1/2004
12/1/2004
11/1/2005
10/1/2006
9/1/2007
8/1/2008
7/1/2009
6/1/2010
5/1/2011
4/1/2012
3/1/2013
US Exports to and Imports from China,
TTM, Y/Y (1994- Present)
US Imports From China, TTM, Y/Y US Exports to China, TTM, Y/Y

6. Nonetheless,despite the re-openingandmassive Yendevaluation,USimportsfromJapanare
DECLININGon a trailingtwelve monthyear-over-yearbasis:
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000 1/1/1993
12/1/1993
11/1/1994
10/1/1995
9/1/1996
8/1/1997
7/1/1998
6/1/1999
5/1/2000
4/1/2001
3/1/2002
2/1/2003
1/1/2004
12/1/2004
11/1/2005
10/1/2006
9/1/2007
8/1/2008
7/1/2009
6/1/2010
5/1/2011
4/1/2012
3/1/2013
2/1/2014
1/1/2015
US Imports from Japan, Level Data
US Imports from Japan, Level Data
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1/1994
10/1/1995
8/1/1996
6/1/1997
4/1/1998
2/1/1999
12/1/1999
10/1/2000
8/1/2001
6/1/2002
4/1/2003
2/1/2004
12/1/2004
10/1/2005
8/1/2006
6/1/2007
4/1/2008
2/1/2009
12/1/2009
10/1/2010
8/1/2011
6/1/2012
4/1/2013
2/1/2014
12/1/2014
US Imports from Japan, TTM, Y/Y
US Imports from Japan, TTM, Y/Y

7. If we focuson US importsoverall,includingthose fromChinaandJapan,we can see that1q15 was
similarfroma level perspective toall 1qUS importdata startingfrom2011. More importantly,froma
level perspective,US1qimportshave not grownsince 2011:
We can alsosee thisfroma year-over-yearperspective:
100,000
200,000
300,000
400,000
500,000
600,000
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US Imports, 1q Level Data (1993-
Present)
US Imports, 1q Level Data (1993-Present)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US Imports, 1q Data, Y/Y (1993-Present)
US Imports, 1q Data, Y/Y (1993-Present)

8. Perhapstoisolate evenmore the USdemandpicture,we focusonUS importsfromGermany,the only
EuropeanUnioncountrythat is inthe top 10 of US importsources(Germanyisthe 5th
largestsource of
imports),one of the largestbeneficiariesof the ECB’srecenteffortstodevaluethe Euroandcompletely
unaffectedbythe US westcoastport closure andre-opening.
As youcan see,ona trailing12 monthbasis,US importsfromGermanycontinue todecelerate:
Thiscan alsobe seenlookingatall 1q data fromy/y perspective:
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1/1994
10/1/1995
8/1/1996
6/1/1997
4/1/1998
2/1/1999
12/1/1999
10/1/2000
8/1/2001
6/1/2002
4/1/2003
2/1/2004
12/1/2004
10/1/2005
8/1/2006
6/1/2007
4/1/2008
2/1/2009
12/1/2009
10/1/2010
8/1/2011
6/1/2012
4/1/2013
2/1/2014
12/1/2014
US Imports from Germany, TTM, Y/Y
US Imports from Germany, TTM, Y/Y

9. We can alsosee sluggishUSdemandbylookingatimportsfromboth Canadaand Mexico,the second
and thirdlargestsource of US imports,bothof whomwere completelyunaffectedbythe US westcoast
port closingandre-opening:
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US Imports from Germany, 1q Y/Y (1993-
Present)
US Imports from Germany, 1q Y/Y (1993-Present)

10. US exportsare also slowing,astobe expectedfromthe USD appreciation(blue line):
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0% 12/1/1994
11/1/1995
10/1/1996
9/1/1997
8/1/1998
7/1/1999
6/1/2000
5/1/2001
4/1/2002
3/1/2003
2/1/2004
1/1/2005
12/1/2005
11/1/2006
10/1/2007
9/1/2008
8/1/2009
7/1/2010
6/1/2011
5/1/2012
4/1/2013
3/1/2014
2/1/2015
US Imports from Canada, TTM, Y/Y
US Imports from Canada, TTM, Y/Y
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
12/1/1994
10/1/1995
8/1/1996
6/1/1997
4/1/1998
2/1/1999
12/1/1999
10/1/2000
8/1/2001
6/1/2002
4/1/2003
2/1/2004
12/1/2004
10/1/2005
8/1/2006
6/1/2007
4/1/2008
2/1/2009
12/1/2009
10/1/2010
8/1/2011
6/1/2012
4/1/2013
2/1/2014
12/1/2014
US Imports from Mexico, TTM Y/Y
US Imports from Mexico, TTM, Y/Y

11. The largest3 destinationsforUS goodsand servicesare,inorder:(i) Canada;(ii) Mexico;and(iii) China.
Lookingat the chart below,we see thatUS exportstoChina(redline) are now decliningforthe firsttime
since 2006-2007, somethingthathasnotbeenimpactedbycurrencyrelatedissuesasthe RMB is
peggedtothe USD:
-35.0%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0% 12/1/1994
9/1/1995
6/1/1996
3/1/1997
12/1/1997
9/1/1998
6/1/1999
3/1/2000
12/1/2000
9/1/2001
6/1/2002
3/1/2003
12/1/2003
9/1/2004
6/1/2005
3/1/2006
12/1/2006
9/1/2007
6/1/2008
3/1/2009
12/1/2009
9/1/2010
6/1/2011
3/1/2012
12/1/2012
9/1/2013
6/1/2014
3/1/2015
US Imports and Exports, TTM, Y/Y
US Exports, TTM, Y/Y US Imports, TTM, Y/Y

12. As a resultof growingUS importsfromChinaand slowingUSexportstoChina,the US trade deficitwith
Chinahitanotherrecord level:
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1/1/1993
12/1/1993
11/1/1994
10/1/1995
9/1/1996
8/1/1997
7/1/1998
6/1/1999
5/1/2000
4/1/2001
3/1/2002
2/1/2003
1/1/2004
12/1/2004
11/1/2005
10/1/2006
9/1/2007
8/1/2008
7/1/2009
6/1/2010
5/1/2011
4/1/2012
3/1/2013
US Exports to and Imports from China,
TTM, Y/Y (1994- Present)
US Imports From China, TTM, Y/Y US Exports to China, TTM, Y/Y
(400,000)
(350,000)
(300,000)
(250,000)
(200,000)
(150,000)
(100,000)
(50,000)
0
US Trade Balance with China, TTM
US Trade Balance with China, TTM

13. US exportsto Canadaare alsoslowing:
AndexportstoMexicoare slowingaswell:
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1/1994
11/1/1995
10/1/1996
9/1/1997
8/1/1998
7/1/1999
6/1/2000
5/1/2001
4/1/2002
3/1/2003
2/1/2004
1/1/2005
12/1/2005
11/1/2006
10/1/2007
9/1/2008
8/1/2009
7/1/2010
6/1/2011
5/1/2012
4/1/2013
3/1/2014
2/1/2015
US Exports to Canada, TTM, Y/Y
US Exports to Canada, TTM, Y/Y

14. -20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0% 12/1/1994
11/1/1995
10/1/1996
9/1/1997
8/1/1998
7/1/1999
6/1/2000
5/1/2001
4/1/2002
3/1/2003
2/1/2004
1/1/2005
12/1/2005
11/1/2006
10/1/2007
9/1/2008
8/1/2009
7/1/2010
6/1/2011
5/1/2012
4/1/2013
3/1/2014
2/1/2015
US Exports to Mexico, TTM, Y/Y
US Exports to Mexico, TTM, Y/Y