Last week we had a dive through UK export figures to the US, with the aim to judge the extent that there had been tariff front-running.
Since US businesses started fearing that Donald Trump would impose tariffs, they have been putting in orders of all their essential inputs and stockpiling them high before the tariffs come in. Given businesses had been front-running tariffs, there would naturally be a period of lower US imports as businesses wound down their inventories.
Right?
Wrong. When we explored the UK export data, we found that there was actually zero tariff front-running. 100% of the tariff front-running was in non-ferrous metals, which we narrowed down to being the gold trade. The gold trade is pretty separate from the real economy and is largely neutral in GDP, so UK exporters did not see temporarily higher demand from US importers.
So the tariff front-running narrative was completely off for the UK. Which got us thinking, to what extent did US businesses front run tariffs overall?
We flipped the script and rather than considering UK exports to the US, we considered US imports. From everybody. And we used our methodology developed last week to analyse to what extent there had been front running and where there were large stocks of inventory which would need to be reduced before US firms imported more.
And the data is even weirder than it was for UK exports.
As a reminder, our methodology from last week is:
Take the trend of imports until November 2024, which was the last full month before imports started soaring on that tariff front-running.
Extend the trend to the latest month of data, which is June 2025.
Find the differential between the actual data and the trend which will give the extent of tariff front-running over December to March and then after March it will show the extent to which this front-running has been given back (as firms reduce inventory rather than importing new products).
Sum the differentials between December and present to get our “front-running balance”, which is the amount of front-running which still needs to be given back, i.e. some measure of how much excess stock businesses have above trend, which they will need to reduce before they start importing again.
We can see quite clearly from the chart above that until March, US goods imports were running above trend, which makes sense given tariffs came in in April. Since April, tariffs have been running below trend. Our front-running balance sits at USD50bn after taking June data into account, worth 0.2% of US GDP.
So far, so good.
However, things very quickly fall apart when we look under the surface.
Breaking down our front-running balance by HS2 code, we can see that there are a few super dominant contributors. In the chart below, we’ve done just that, while only focussing on the large positive contributors (above USD3bn) and equally large negative contributors (the smaller contributors are all summed up into other, with the negative and positive ones largely cancelling out).
Negative contributors you ask? Yes, we have negative balances as there are many goods where the actual imports over Dec-Jun has been substantially below the trend to November.
The thing that instantly jumps out in the above chart is the two columns which make up the vast majority of the positive prints, HS2 71 and HS2 29. Say we consider just the positive front-running balances from our entire data set (the positive balances being the only ones that are actually front-running), HS2 71 constitutes 51.8% of the total as of June, and HS2 29, 20.5%.
If we consider total imports excluding these two categories, our front-running balance for June flips from +USD49.9bn to -USD65.6bn, i.e. there is no aggregate front-running without these two.
So what are they?
HS2 71 is of course Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin. Which we can further breakdown all the way up to our HS 10 codes, where we can see HS 7115900530 driving USD71.5bn of our balance in June. And what is HS 7115900530? It is Artcls Of Pre Met, Rec Shpe, 99.5% Pure, Of Gold (gm). Fking gold. Again.
Well, what about HS2 29? By the same process we can see the front running balance is dominated by HS 2937190000, which is of course Polypeptide, Protein & Glycoprotein Hormones,nesoi (gm), driving a USD27.4bn balance.
So we asked Chat GPT what is in this category and got this:
Which gave me a brain wave (lol ignore my spelling of semaglutide). Weight loss drugs.
Could the entire US tariff front-running narrative be just based on higher gold and weight-loss drug imports?
As far as I can tell, we cannot say for sure that the jump in 2937190000 imports is weight loss drugs given 2937190000 contains loads of other stuff, including non-pharma imports. But given semaglutide sales are going gangbusters, and they are in this category, it might make sense.
Anyway, below is US goods imports with these netted out. We see 0 front running besides a very small uptick in March for imports ex. 7115900530 & 2937190000.
So there we have it. There was no broad based US tariff front-running. Just a huge jump in gold imports, possibly as US tariffs would screw those trying to settle gold futures contracts on NYMEX, and (probably) a big jump in weight loss drug imports too.
For what it’s worth, Trump confirmed on 11 August that gold would not face tariffs, making all that front-running completely unnecessary.
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