the trade deficit is deteriorating again

Clouds are multiplying for French foreign trade. According to the latest customs figures released on Tuesday, January 8, the trade deficit widened from one billion euros to 5.1 billion euros in November. From January to November, the cumulative deficit of the French trade balance reached 58 billion euros, against 60.7 billion for the same period in 2017.

In their last note of conjuncture, economists of INSEE underline that the contribution of the foreign trade to the gross domestic product (PIB) would be favorable over the whole of the year 2018 (0.6 point against 0.1 point in 2017 ). On the other hand, the outlook for 2019 is much less favorable. The contribution of foreign trade to growth would be negative (0.3 point). Tensions currently weighing on world trade could have negative repercussions on French trade. If the economic battle between the United States and China concerns only a small part of the world's trade, it can contribute to creating a climate of uncertainty regularly highlighted by the international institutions in their economic projections.

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Fall in the shipbuilding industry

In November, imports fell again, falling by 1.8% after a rise of 2.3% the previous month, and amounted to 46.3 billion euros. At the same time, exports declined sharply, falling 4.4% after jumping 6.1% in October to € 41.2 billion.

November's deterioration for exports is linked "the drop in shipments of the shipbuilding industry following the exceptional sales of the month latest. Deliveries of "cruise ships, cruise ships and similar vessels" had peaked in October according to the release of the customs service.

In aeronautics and space, the deterioration of the trade balance is more measured. "Sales, while falling back, remain at a high level, while the slowdown in purchases continues." Customs say that in November, deliveries of Airbus reached 3.15 billion euros for 39 aircraft against 3.2 billion euros for 41 aircraft (including an A380) in October. "With these high results, respectively the fifth and fourth best absolute performance of the aircraft manufacturer, the sharp recovery of its final deliveries abroad is affirmed at the end of the year."

By geographical area, the deficit with the European Union narrowed slightly in November. The trade balance improved notably with Spain and Portugal. In total, the deficit with the countries of the European Union (EU) reached 2.69 billion in November (against 2.71 billion the previous month). With the euro zone alone, it registered at 3.22 billion against 3.42 billion a month earlier. On the other hand, the trade balance deteriorated with the United Kingdom due to the decline in exports after the October surge. The uncertainties surrounding the outcome of the Brexit could still weigh in the future on foreign trade on both sides of the Channel. In total, the deficit with countries outside Europe widened to 3.59 billion euros in November, against 2.87 billion the previous month.

Society's fine punishes balance of payments

On the side of the balance of payments (which takes into account all flows of assets, real, financial and monetary) has deteriorated according to the release of the Bank of France published on Tuesday. According to the banking institution, the deficit widened to 2.8 billion euros in November against 0.3 billion euros in October. This deterioration is mainly explained by the poor figures for foreign trade in goods from -3.1 billion to -4.3 billion between October and November. For its part, the balance of services remains surplus and at the same level (2 billion).

The other factor that may have weighed on the deterioration of the balance is the exceptional payment of a fine of 1.3 billion dollars for the resolution of a litigation of the Société Générale with the US authorities to put an end to the investigations relating to violations of embargoes in the United States. This exceptional regulation should allow the figures of foreign trade tricolor to recover at the end of the year 2018.

> Read also: Embargo violation: Soc Gen plans to pay € 1.1 billion in fines in the United States

Tensions on world trade remain present

In early December, US President Donald Trump and his Chinese counterpart Xi Jinping marked a pause in the trade battle that began a few months earlier. While the US billionaire had planned a tax increase from January 1, the two heads of state decided to let 90 days to try to find a deal in G20 Mardu held in Buenos Aires. Since the beginning of the week, Beijing and Washington have resumed trade negotiations in a dialogue "positive and constructive" According to a spokesman for the Chinese Ministry of Foreign Affairs reported by the agency Reuters. But the disputes between the first two world economic powers are far from being solved, particularly in the field of intellectual property or trade openness.

In this still tense context, INSEE economists anticipate a fall in French exports despite a sustained global demand from France. The statistics institute note "a return to normal aeronautical deliveries.They would retreat in the first quarter despite the delivery of a large naval contract (-0.3%) and stabilize in the spring." In the end, exports would be stagnating in 2018 and early 2019.