Latest news with #JulianEvans-Pritchard
The Guardian
14-04-2025
- Business
- The Guardian
Asian markets rise on signs of Trump tariff retreat; British Steel races to keep furnaces burning
China's exports rose sharply last month as factories rushed out shipments before the latest US tariffs took effect, and because of the timing of the lunar new year holiday. Exports climbed by 12.4% year-on-year in March, a five-month high, and ahead of economists' expectations of 4.4% growth. In February, they fell by 3%. The rebound was largely related to the timing of the lunar new year, as the holiday fell in early February this year. However, economists warned that this will soon be eclipsed by the escalating trade war between the US and China. Julian Evans-Pritchard, head of China economics at Capital Economics, said: Export growth accelerated in March, as manufacturers rushed to ship goods to the US ahead of 'Liberation Day'. But shipments are set to drop back over the coming months and quarters. We think it could be years before Chinese exports regain current levels. By destination, exports were supported by a sharp recovery to the G7, especially the US, where shipments rose by 9.1% year-on-year in March, compared to a fall of 9.8% in February. Exports to the UK jumped by 16.3% from a 13.9% drop, while shipments to the EU rebounded to 10.3% following a 11.5% decline in February. Exports to Africa jumped by 37% and shipments to ASEAN countries rose by 11.6% following February's 8.8% rise (shipments to the region didn't dip during the festive period as they did elsewhere). Kelvin Lam, senior China+ economist at Pantheon Macroeconomics, said: On trade policy, president Trump exempted some electronics imports from tariffs late Friday, later clarifying that it was only a temporary reprieve, with new sector-specific tariffs to be imposed on semiconductors and consumer electronics in the 'not too distant future.' Notably, the suspension does not apply to the existing 20% tariff imposed on China over its role in the fentanyl trade. In any case, the temporary relief for the electronics sector may offer some breathing room for Chinese exporters before the new tariffs come into effect. We expect more clarity on the new tariff rates once the Section 232 Investigation concludes — with a likely range of 10% to 125%, according to US Commerce Secretary Howard Lutnick. Share Asian shares have risen, as a Chinese official said 'the sky won't fall' –– despite a warning from US officials that an exemption of smartphones, laptops and other electronic products from import tariffs on China will be short-lived, as Donald Trump said no one was 'getting off the hook.' Japan's Nikkei gained 1.7% while Hong Kong's Hang rose by over 2% and the Shanghai and Shenzhen exchanges climbed by 0.7% and 0.4% respectively. The gains have brought some respite to markets after days of heavy selling when trillions of dollars were wiped off global stock markets, as a wave of US tariffs sent shockwaves around the world. A Chinese customs official said 'the sky won't fall' for the country's exports, despite the darkening outlook, according to the state news agency Xinhua. In recent years, China has made steady progress in diversifying its foreign trade markets and deepening industrial and supply chain cooperation with partners around the world, according to Lyu Daliang, an official with the GAC. These efforts have not only supported our partners' development but also enhanced our own resilience. US stocks are also expected to stage a recovery, after the US president excluded imports of smartphones and laptops from his tariff regime late on Friday night. However, he said in a social media post on Sunday: There was no Tariff 'exception'. These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff 'bucket.' In the post on his Truth Social platform, Trump promised to launch a national security trade investigation into the semiconductor sector and the 'whole electronics supply chain'. Trump told reporters aboard Air Force One, as he travelled back to Washington from his estate in West Palm Beach, that tariffs on semiconductors would be announced this week and a decision on phones made 'soon'. Gold has hit a new record high, of $3,245.42 an ounce, seen as a safe-haven in times of turbulence. It is now traded at $3,232 an ounce, down 0.1% on the day. Over here, British Steel is to deploy emergency measures in a race against time to save the blast furnaces at Scunthorpe, while the business secretary, Jonathan Reynolds, declined to guarantee the plant could get what it needed in time. The company is understood to be looking at offers of help from more than a dozen businesses to obtain materials such as iron ore and coking coal, potentially allowing it to avoid the temporary shutdown of one of the two furnaces. On Saturday, parliament passed a one-day bill containing emergency powers to gain control of the Scunthorpe site after its Chinese owner, Jingye, declined government support to keep the plant running over the next few weeks. British Steel's UK management team is now scrambling to buy the materials, with help from government officials. Share
The Independent
07-03-2025
- Business
- The Independent
China's exports and imports weaken in Jan-Feb as demand slides amid global trade uncertainty
China's exports rose a less-than-expected 2.3% in January and February from a year earlier while imports fell more than 8% in a slow start to a year dogged by uncertainty over U.S. tariffs and other policies. Economists had forecast that exports would rise 5% year-on-year and that imports would edge higher. China's overall trade surplus grew to $170.52 billion in the first two months of the year. China's customs agency typically publishes combined trade data for January and February to avoid any distortion from slowdowns during the week-long Lunar New Year holidays. 'Export growth cooled over the first two months of 2025, with tariff front-running providing less of a boost to demand than we had anticipated,' said Julian Evans-Pritchard of Capital Economics. 'This slowdown comes before any substantial hit from tariffs, which will almost certainly lead to sharp falls in shipments to the U.S. before long,' he said. Evans-Pritchard said that the slowdown in imports suggests that the pick up in demand driven by government stimulus spending late last year has 'already partially reversed.' This week, U.S. President Donald Trump 's second of two 10% hikes in tariffs on imports from China took effect and that is likely to hurt Chinese exports in coming months. To a certain extent, buyers and Chinese suppliers had rushed to beat those increases in import duties. Chinese officials have slammed the tariff increases but also expressed confidence that the economy is resilient and that trade with other countries can help compensate for any declines in exports to the U.S. after the tariffs took effect. They have also said they are open to talks on a mutually respectful basis. Last year, exports helped China attain its target economic growth rate of 5%. The government again has set the target for around 5%, despite uncertainties over the outlook for trade this year. Exports to the U.S. grew 2.3% in annual terms in January-February, while shipments to the European Union and Japan grew just 0.6% and 0.7% respectively. Exports to Russia fell 10.9%. The Association of South-East Asian Nations (ASEAN) remained China's biggest trading partner, with shipments growing 5.7% year-on-year. 'While we don't read too much into a few months of data, the breakdown does pose questions about how export trends might look once tariffs start to drag on the U.S., too,' Lynn Song of ING Economics said in a report. 'With tariffs coming into effect in February and March, it's likely that the impact will be seen gradually in the coming months,' she said.
Associated Press
07-03-2025
- Business
- Associated Press
China's exports and imports weaken in Jan-Feb as demand slides amid global trade uncertainty
HONG KONG (AP) — China's exports rose a less-than-expected 2.3% in January and February from a year earlier while imports fell more than 8% in a slow start to a year dogged by uncertainty over U.S. tariffs and other policies. Economists had forecast that exports would rise 5% year-on-year and that imports would edge higher. China's overall trade surplus grew to $170.52 billion in the first two months of the year. China's customs agency typically publishes combined trade data for January and February to avoid any distortion from slowdowns during the week-long Lunar New Year holidays. 'Export growth cooled over the first two months of 2025, with tariff front-running providing less of a boost to demand than we had anticipated,' said Julian Evans-Pritchard of Capital Economics. 'This slowdown comes before any substantial hit from tariffs, which will almost certainly lead to sharp falls in shipments to the U.S. before long,' he said. Evans-Pritchard said that the slowdown in imports suggests that the pick up in demand driven by government stimulus spending late last year has 'already partially reversed.' This week, U.S. President Donald Trump's second of two 10% hikes in tariffs on imports from China took effect and that is likely to hurt Chinese exports in coming months. To a certain extent, buyers and Chinese suppliers had rushed to beat those increases in import duties. Chinese officials have slammed the tariff increases but also expressed confidence that the economy is resilient and that trade with other countries can help compensate for any declines in exports to the U.S. after the tariffs took effect. They have also said they are open to talks on a mutually respectful basis. Last year, exports helped China attain its target economic growth rate of 5%. The government again has set the target for around 5%, despite uncertainties over the outlook for trade this year. Exports to the U.S. grew 2.3% in annual terms in January-February, while shipments to the European Union and Japan grew just 0.6% and 0.7% respectively. Exports to Russia fell 10.9%. The Association of South-East Asian Nations (ASEAN) remained China's biggest trading partner, with shipments growing 5.7% year-on-year. 'While we don't read too much into a few months of data, the breakdown does pose questions about how export trends might look once tariffs start to drag on the U.S., too,' Lynn Song of ING Economics said in a report.
Nahar Net
05-03-2025
- Business
- Nahar Net
China sticks to economic growth target of 'around 5%' despite looming trade war
by Naharnet Newsdesk 05 March 2025, 15:44 The Chinese government unveiled an annual economic growth target of "around 5%" on Wednesday, despite the possible negative impact of a looming trade war with the United States, and pledged to address what it called "inadequate" consumer spending at home. The target, announced at the opening session of the annual meeting of China's legislature, is the same as the last two years but will likely be more difficult to achieve because of higher U.S. tariffs on Chinese products and other economic headwinds. The use of the modifier "around" gives the government some wiggle room if growth falls short of the target. The level signals the government's intention to try to stabilize growth in challenging economic times but hold back on more dramatic action that some economists say is needed to supercharge it. The government also said in a draft budget released Wednesday that defense spending would rise 7.2% this year to 1.78 trillion yuan ($245 billion), second only to the United States. It released the growth target in a separate report, portions of which were presented to the nearly 3,000 members of the National People's Congress by Premier Li Qiang in a 55-minute address. The 32-page document acknowledged both international and domestic challenges. "An increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science, and technology," the report said. "Domestically, the foundation for China's sustained economic recovery and growth is not strong enough. Effective demand is weak, and consumption, in particular, is sluggish." The IMF has projected China's economy will grow 4.6% this year, down from 5% in 2024, according to Chinese government statistics. The annual report placed more emphasis on reviving domestic demand and consumption than last year's version, echoing a shift by the ruling Communist Party at meetings in December. It said the government should "make domestic demand the main engine and anchor of economic growth." The question is whether the steps the government takes will be enough to stabilize the economy and reach its targets for growth, employment and other economic indicators. "Achieving this year's targets will not be easy, and we must make arduous efforts to meet them," the report said. It offered some details on the party's plans for a "more proactive fiscal policy," including a rise in the government budget deficit from 3% to 4% of GDP, or the size of the overall economy. Economists expressed doubts over whether the policies will do enough, noting that the government reduced its inflation target to 2% from 3% last year, suggesting leaders have accepted that the economy is still mired in deflation, or a cycle of weakening prices. The degree of support is "more modest than it may appear," Julian Evans-Pritchard of Capital Economics said in a report. "We remain skeptical that it will be sufficient to prevent growth from slowing this year, especially given the headwinds on the external front and the lack of a more pronounced shift in government spending toward support for consumption." The government will issue 1.3 trillion yuan ($180 billion) in ultra-long term bonds, up from 1 trillion yuan last year, the report said. Of that, 300 billion yuan would go toward a program launched last year that offers rebates to consumers who trade in automobiles or appliances for new ones, doubling central government support for the program. Across-the-board 20% tariffs imposed on Chinese products by U.S. President Donald Trump pose the latest threat to an economy already weighed down by a prolonged real estate slump and sluggish consumer spending and private business investment. The tariffs could crimp sales to one of China's major export markets, making the need to boost domestic demand more urgent. At the same time, Chinese leader Xi Jinping wants to wean the economy off its long-running dependence on the highly indebted real estate market. He is directing economic resources into developing a more innovative, high-tech economy — and with growing restrictions on U.S. technology exports to China, one that isn't beholden to other countries for the most powerful semiconductors and other electronic components. That has remained an overarching long-term economic goal of the Communist Party, though it has enacted various measures since September that suggest a shift in emphasis toward shoring up growth in the short-term. "A target of around 5% is well aligned with our mid- and long-term development goals and underscores our resolve to meet difficulties head-on and strive hard to deliver," Li said, reading from the government report. The report highlighted artificial intelligence in a section on fostering "industries of the future," saying the government would support the application of large-scale AI models, smart manufacturing equipment, connected vehicles and intelligent robots. It also reiterated the party's announcement in December that the central bank would shift its monetary policy from "prudent" to "moderately loose" for the first time in more than a decade.
Yahoo
05-02-2025
- Business
- Yahoo
China holds out hope last-minute deal can avert US trade war
China's new tariffs on US imports like oil, coal and cars are relatively modest in scale, suggesting that Beijing is hoping for a last-minute deal but also giving them the option to inflict more pain if needed, analysts say. China on Tuesday fired a return salvo in its escalating trade war with the United States, slapping fresh tariffs on everything from American crude oil to agricultural machinery. The moves hit roughly $20 billion worth of US goods per year -- roughly 12 percent of total American imports into China, according to calculations by Capital Economics. Over a third of that is energy: according to Beijing customs data, imports of oil, coal and LNG totalled more than $7 billion last year. Beijing has also slapped fresh export controls on rare metals and chemicals including tungsten, tellurium, bismuth, indium and molybdenum, used in everything from mining to phone screens. China dominates global supply chains for rare metals. The countermeasures came as a surprise to some -- analysts at UBS this week told AFP they had expected Beijing to keep its powder dry. But they are a far cry from the 10 percent tariffs slapped on all Chinese imports by US President Donald Trump this week that will affect some $450 billion worth of goods. "The measures are fairly modest, at least relative to US moves," Capital Economics's Julian Evans-Pritchard said. They "have clearly been calibrated to try to send a message to the US (and domestic audiences) without inflicting too much damage," he added. - Limited room for manoeuvre - That restraint can in part be explained by China's reliance on many US imports for its industries and its longstanding economic woes at home, Agatha Kratz at the Rhodium Group told AFP. "Given the current economic downturn, China cannot afford -- and does not want -- to impose excessive trade barriers," she said. "China's economy is in a fragile state, and this limits its ability to act freely," she explained. "Beijing cannot afford to take reckless actions, and I don't think it wants to." Far from inflicting deep pain, analysts say Beijing's goal is to send a message to Washington: that China can and will retaliate to swingeing tariffs. "These tariffs are structured to signal China's capacity to endure prolonged economic confrontation while forcing the US to deal with internal economic pressures," Mingzhi Jimmy Xu, an assistant professor at Peking University, to AFP. - 'Serious damage' - And Beijing can do "serious damage" to the United States should it decide to, Shehzad Qazi from China Beige Book told AFP. The US remains heavily reliant on China for critical minerals needed to produce electric vehicles, their batteries and other key industrial applications. Washington has had a flavour of this. In December, Beijing banned exports of metals gallium, antimony and germanium, key components in semiconductors. That it had chosen not to, analysts say, suggests Beijing is keen to leave the door open to negotiations with Washington that could see the tariffs reversed. Trump on Monday indicated a call with Chinese counterpart Xi Jinping could be imminent, hinting that a similar volte-face could be in the works. But he later rolled back that claim, saying he was in "no rush" to speak with the Chinese leader. Both Mexico and Canada -- hit with 25 percent tariffs over the weekend -- succeeded in securing a 30-day stay in last-minute deals with the US. Beijing may be hoping for the same kind of agreement -- likely tied to a further commitment to crack down on the trafficking of fentanyl and the ownership of social media app TikTok. "The Chinese tariffs do not go into effect until five days from now, a long time in Trump world," Wendy Cutler, a former US trade official, said in a note. But "the question is whether Trump will react in the same way to such threats" from China, Alicia Garcia Herrero at Natixis told AFP. "If he doubles down, China will have a problem." aas-oho/je/stu
