Moreover, more developed economies, such as Mexico and Canada, our most important trading partners, have also been affected, with Canadian GDP declining in the first two quarters of the year. 5 In addition, many non-commodity-producing East Asian economies are closely tied to China through trade and investment.
Because of these ties, and for other idiosyncratic reasons, growth in East Asian economies has been weak so far this year. Growth in emerging Asia economies outside of China that are important destinations of U.S. exports slipped to 2–1/2 percent in the first half of the year, well below a trend rate of close to 5 percent.