Biden’s choice – the (not so) curious case of U.S. export weakness
U.S. international trade activity fell for a 16th straight month in December with a 4.7% year over year decline. Services fell by 22.7% due to the continued loss of transport and travel revenues resulting from the pandemic while imports of goods climbed 4.8% higher on increased demand for consumer products.

Exports meanwhile continued to decline with a drop of 3.0%. That came despite a 64.5% surge in exports to China linked to the phase 1 trade deal. Excluding China exports dropped by 6.7%, led by pandemic-linked declines in energy and aerospace products which fell by 19.9% and 51.8% respectively.

Exports of the 548 products covered by the phase 1 trade deal with China surged 96.0% higher year over year to reach $11.3 billion in the month versus $11.9 billion targeted in the trade deal. Agricultural and energy products led the way with growth of 102.4% and 3500% respectively while industrial goods rose by 20.3%.

The next review of the phase 1 trade deal by the two governments is due 12 months after the mid-February 2020 implementation of the deal. The discussions may factor in the aggregate shortfall with total phase 1 goods exports in 2020 reaching $90.1 billion versus the $143.1 billion implied by the commitments made in the original deal. The Biden administration may need more than a shortfall of spending to take the symbolic act of cancelling the deal despite an all-of-government approach to dealing with China.
(Panjiva Research - Policy)

Peloton’s speedy shipping adds costs equivalent to 5% of revenues
Peloton has reported a 128% growth in revenues in FQ2’21 (calendar Q4’20) as it works to reduce "long order-to-delivery timeframes". The firm still faces "West Coast port delays and COVID-related factors" in completing its deliveries. In the first half of calendar 2021 the firm expects to spend $50 million per quarter on average on "expedited shipping costs" which compares to $1.1 billion of revenues in management guidance for FQ3’21, or 4.5% of revenues.

U.S. seaborne imports linked to the fitness equipment maker climbed 261% sequentially in the three months to Nov. 30 but have since fallen by 21.1% on average in December in January, suggesting its shipping issues aren’t over. The firm’s purchase of Precor diversifies Peloton’s revenues but brings similar supply chain challenges.

Imports linked to Precor climbed 180.4% in the three months to Nov. 30 sequentially before falling by 15.8% on average in the past two months. The rest of the industry is doing somewhat better with imports having expanded by 17.2% in December and January combined, including imports linked to Nautilus and Icon Fitness.