China exports beat forecasts ahead of US tariff talks
BEIJING: Chinese exports rose last month despite the trade war raging with the United States, official data showed Friday ahead of talks between the world's top two economies towards easing the standoff.
Experts said that the forecast-smashing 8.1-percent rise indicated that Beijing was re-routing trade to Southeast Asia to mitigate US tariffs of up to 145 percent on Chinese imports imposed by President Donald Trump. Trade between the world's two largest economies has slumped since Trump imposed the tariffs — some cumulative duties are 245 percent — and China responded with levies of 125 percent and other measures.
The year-on-year increase in exports of 8.1 percent in April was much higher than the 2.0 percent forecast by analysts polled by Bloomberg last month. The data from the Chinese customs bureau showed exports to Thailand, Indonesia and Vietnam surged by double digits, in what one analyst called a 'structural repositioning' of trade. 'The global supply chain is being rerouted in real time,' Stephen Innes of SPI Asset Management wrote in a note.
'Vietnam looks set to become China's offshore escape hatch for US-facing goods,' he said.
'The manufacturing juggernaut is diverting flow wherever the tariff pain isn't.' Month-on-month exports to the United States plunged 17.6 percent. Analysts at ANZ Research said the data revealed 'it is difficult to exclude China from the global supply chain in the short term, considering China's role in manufacturing.' 'The implied supply chain realignment as well as the expected outcome of Asia-US trade talks suggests no imminent collapse in China exports,' they added.
Global markets have been on a rollercoaster since Trump began his tariff offensive aimed according to the White House at bringing back manufacturing to the United States. While Trump has suspended for 90 days many of the most painful levies, those on China have remained in place. Markets have been lifted by optimism over meetings set to take place in Geneva over the weekend between US and Chinese officials — the first talks between the superpowers since Trump's trade offensive began.
Washington has said it hopes the sitdown will allow for a 'de-escalation', while Beijing has vowed it will stand its ground and defend its interests. — AFP
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, also attributed the forecast-beating exports to 'transshipment through other countries.' But he also cited potential 'trade contracts that were signed before the tariffs were announced.' 'I expect trade data will weaken in the next few months.'
Imports were also being closely watched as a key gauge of consumer demand in China, which has remained sluggish. They also beat expectations, dropping 0.2 percent, compared with the 6.0-percent slide analysts had estimated. Chinese policymakers this week eased key monetary policy tools in a bid to ramp up domestic activity.
Those included cuts to a key interest rate and moves to lower the amount banks must hold in reserve in a bid to boost lending. A persistent crisis in the Chinese property sector—once a key driver of growth—also remains a drag on the economy. In an effort to help the sector, Beijing's central bank chief said it would cut the rate for first-time home purchases with loan terms over five years to 2.6 percent, from 2.85 percent. The moves represent some of China's most sweeping steps to boost the economy since September.
But analysts pointed to a continued lack of actual stimulus funds needed to get the economy back on track—a task further complicated by trade headwinds with Washington. 'Even if the tariffs may be trimmed depending on the outcome of US-China trade talks, the persisting uncertainties will continue to accelerate decoupling structurally,' Gary Ng, senior economist for Asia Pacific at Natixis, told AFP. – AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab Times
2 days ago
- Arab Times
Trump-Musk Feud Threatens Tesla, SpaceX, and Starlink Growth
NEW YORK (AP) — The world's richest man could lose billions in his fight with world's most powerful politician. The feud between Elon Musk and Donald Trump could mean Tesla's plans for self-driving cars hit a roadblock, SpaceX flies fewer missions for NASA, Starlink gets fewer overseas satellite contracts and the social media platform X loses advertisers. Maybe, that is. It all depends on Trump's appetite for revenge and how the dispute unfolds. Joked Telemetry Insight auto analyst Sam Abuelsamid, 'Since Trump has no history of retaliating against perceived adversaries, he'll probably just let this pass.' Turning serious, he sees trouble ahead for Musk. 'For someone that rants so much about government pork, all of Elon's businesses are extremely dependent on government largesse, which makes him vulnerable.' Trump and the federal government also stand to lose from a long-running dispute, but not as much as robotaxis The dispute comes just a week before a planned test of Tesla's driverless taxis in Austin, Texas, a major event for the company because sales of its EVs are lagging in many markets, and Musk needs a win. Trump can mess things up for Tesla by encouraging federal safety regulators to step in at any sign of trouble for the robotaxis. Even before the war of words broke out on Thursday, the National Highway Transportation Safety Administration requested data on how Musk's driverless, autonomous taxis will perform in low-visibility conditions. That request follows an investigation last year into 2.4 million Teslas equipped with full self-driving software after several accidents, including one that killed a pedestrian. A spokesman for NHTSA said the probe was ongoing and that the agency 'will take any necessary actions to protect road safety.' The Department of Justice has also probed the safety of Tesla cars, but the status of that investigation is unclear. The DOJ did not respond immediately to requests for comment. The promise of a self-driving future led by Tesla inspired shareholders to boost the stock by 50% in the weeks after Musk confirmed the Austin rollout. But on Thursday, the stock plunged more than 14% amid the Trump-Musk standoff. On Friday, it recovered a bit, bouncing back nearly 4%. 'Tesla's recent rise was almost entirely driven by robotaxi enthusiasm,' said Morningstar analyst Seth Goldstein. 'Elon's feud with Trump could be a negative.' Carbon credits business One often-overlooked but important part of Tesla's business that could take a hit is its sales of carbon credits. As Musk and Trump were slugging it out Thursday, Republican senators inserted new language into Trump's budget bill that would eliminate fines for gas-powered cars that fall short of fuel economy standards. Tesla has a thriving side business selling 'regulatory credits' to other automakers to make up for their shortfalls. Musk has downplayed the importance of the credits business, but the changes would hurt Tesla as it reels from boycotts of its cars tied to Musk's time working for Trump. Credit sales jumped by a third to $595 million in the first three months of the year even as total revenue slumped. Reviving sales Musk's foray into right-wing politics cost Tesla sales among the environmentally minded consumers who embraced electric cars and led to boycotts of Tesla showrooms. If Musk has indeed ended his close association with Trump, those buyers could come back, but that's far from certain. Meanwhile, one analyst speculated earlier this year that Trump voters in so-called red counties could buy Teslas 'in a meaningful way.' But he's now less hopeful. 'There are more questions than answers following Thursday developments,' TD Cowen's Itay Michaeli wrote in his latest report, 'and it's still too early to determine any lasting impacts.' Michaeli's stock target for Tesla earlier this year was $388. He has since lowered it to $330. Tesla was trading Friday at $300. Tesla did not respond to requests for comment. Moonshot mess Trump said Thursday that he could cut government contracts to Musk's rocket company, SpaceX, a massive threat to a company that has received billions of federal dollars. The privately held company that is reportedly worth $350 billion provides launches, sends astronauts into space for NASA and has a contract to send a team from the space agency to the moon next year. But if Musk has a lot to lose, so does the U.S. SpaceX is the only U.S. company capable of transporting crews to and from the space station, using its four-person Dragon capsules. The other alternative is politically dicey: depending wholly on Russia's Soyuz capsules. Musk knew all this when he shot back at Trump that SpaceX would begin decommissioning its Dragon spacecraft. But it is unclear how serious his threat was. Several hours later — in a reply to another X user — he said he wouldn't do it. Starlink impact? A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk's once-close relationship with the president. Musk announced that Saudi Arabia had approved Starlink for some services during a trip with Trump in the Middle East last month. The company has also won a string of other recent deals in Bangladesh, Pakistan, India and elsewhere as Trump has threatened tariffs. It's not clear how much politics played a role, and how much is pure business. On Friday, The Associated Press confirmed that India had approved a key license to Starlink. At least 40% of India's more than 1.4 billion people have no access to the internet. Ad revival interrupted? Big advertisers that fled X after Musk welcomed all manner of conspiracy theories to the social media platform have started to trickle back in recent months, possibly out of fear of a conservative backlash. Musk has called their decision to leave an 'illegal boycott' and sued them, and the Trump administration recently weighed in with a Federal Trade Commission probe into possible coordination among them. Now advertisers may have to worry about a different danger. If Trump sours on X, 'there's a risk that it could again become politically radioactive for major brands,' said Sarah Kreps, a political scientist at Cornell University. She added, though, that an 'exodus isn't obvious, and it would depend heavily on how the conflict escalates, how long it lasts and how it ends.'
Arab Times
4 days ago
- Arab Times
Asian shares trade mixed after Wall Street's rally stalls on US economic data
TOKYO, June 5, (AP): Asian shares were mixed on Thursday, as Wall Street's big recent rally lost some momentum following a pair of potentially discouraging reports on the American economy. US futures edged lower and oil prices declined. Japan's benchmark Nikkei 225 shed 0.2% to 37,658.46, while Australia's S&P/ASX 200 declined nearly 0.1% to 8,535.10. In South Korea, the Kospi jumped 2.1% to 2,829.48 after the country's new president and leading liberal politician Lee Jae-myung began his term, vowing to restart talks with North Korea and beef up a trilateral partnership with the US and Japan. Hong Kong's Hang Seng gained 0.9% to 23,856.54, while the Shanghai Composite was little changed, inching down less than 0.1% to 3,374.30. On Wednesday, the S&P 500 finished the day virtually unchanged at 5,970.81 and remained 2.8% below its all-time high. The Dow Jones Industrial Average fell 0.2% to 42,427.74, and the Nasdaq composite added 0.3% to 19,460.49. The action was stronger in the bond market, where Treasury yields tumbled following the weaker-than-expected economic updates. One said that activity contracted for US retailers, finance companies and other businesses in the services industries last month, when economists were expecting to see growth. Businesses told the Institute for Supply Management in its survey that all the uncertainty created by tariffs is making it difficult for them to forecast and plan. A second report from ADP suggested US employers outside of the government hired far fewer workers last month than economists expected That could bode ill for Friday's more comprehensive jobs report coming from the US. Labor Department, which is one of Wall Street's most anticipated data releases each month. So far, the US job market has remained remarkably resilient despite years of high inflation and now the threat of President Donald Trump's high tariffs. But weakness there could undermine the rest of the economy
Kuwait Times
4 days ago
- Kuwait Times
S Korea's leader vows to ‘heal wounds' with nuke-armed North
SEOUL: South Korea's President Lee Jae-myung vowed to reach out to the nuclear-armed North and 'heal wounds' as he took office Wednesday, after winning a snap election triggered by his predecessor's disastrous martial law declaration. South Korea's new center-left leader also warned that 'rising protectionism and supply chain restructuring' pose an existential threat to Asia's export-dependent fourth-largest economy, which has been buffeted by the global trade chaos sparked by US President Donald Trump. Lee scored a thumping victory over conservative Kim Moon-soo of the disgraced ex-president's former party. His term began immediately after the vote tally was certified Wednesday. Lee secured 49.4 percent of the vote, ahead of the 41.2 percent for Kim - who conceded, having been hampered by party infighting and a third-party candidate splitting the right-wing vote. Lee spoke to South Korea's top military commander and formally assumed operational control of the country's armed forces Wednesday, urging them to maintain 'readiness' in case of Pyongyang's provocations - but said in his first comments that he was ready to talk. 'We will heal the wounds of division and war and establish a future of peace and prosperity,' he said. 'No matter how costly, peace is better than war.' He said Seoul would 'deter North Korean nuclear and military provocations while opening communication channels and pursuing dialogue and cooperation to build peace on the Korean Peninsula'. Lee took office just hours before US tariffs on steel and aluminum were due to take effect, with the 50 percent levy hitting crucial South Korean exports. 'The rapid changes in the global order such as rising protectionism and supply chain restructuring pose a threat to our very survival,' Lee said. Markets reacted favorably to the election, with the benchmark KOSPI and the won rising Wednesday. 'Significant departure' Lee's comments on North Korea are a 'significant departure' from those of his hawkish predecessor as he did not immediately attach preconditions to dialogue, said Hong Min, a senior analyst at the Korea Institute for National Unification. It signals 'his desire to resolve disagreements through talks', Hong told AFP. Lee held a modest inauguration ceremony at the National Assembly - where Yoon deployed armed troops on the night he attempted to suspend civilian rule. Lee also announced a number of top appointments, including long-time adviser Kim Min-seok as prime minister and former unification minister Lee Jong-seok as spy chief. Lee's day is expected to end with a flurry of congratulatory phone calls from world leaders, with Trump likely to be the first on the line. Trump's top diplomat, Marco Rubio, was swift to offer his own congratulations and voice hope for working with Lee, who previously sought greater distance from the United States. Washington's alliance with Seoul was 'ironclad', the US secretary of state said, citing 'shared values and deep economic ties'. In a statement, the White House described the election as 'free and fair'. But it added: 'The United States remains concerned and opposed to Chinese interference and influence in democracies around the world'. Chinese President Xi Jinping congratulated Lee, while emphasizing the 'great importance to the development of China-South Korea relations'. 'The Chinese side is willing to work with the South Korean side to ... firmly maintain the direction of good-neighborly friendship, adhere to the goal of mutual benefit and win-win,' Xi said, according to state media CCTV. Japanese Prime Minister Shigeru Ishiba also said he wanted to 'energize cooperation' between Seoul and Tokyo, South Korea's former colonial ruler. And India's Narendra Modi said on X he wanted to 'strengthen' ties with Seoul as he congratulated Lee. 'Positive direction' Lee comes to power with his party already holding a parliamentary majority - secure for the next three years - meaning he is likely to be able to get his legislative agenda done. On the streets of Seoul, South Koreans said they welcomed Lee's overtures to the North. 'Since our economy and many other aspects of society are closely linked to the state of inter-Korean relations, I hope we can take a long-term perspective and move in a more positive direction,' Choi Ki-ho, 55, told AFP. Lee Ju-yeon, a 42-year-old quasi-public sector employee, said they hoped Lee 'will devote himself to uniting our divided nation'. — AFP
