Trade figures released on Friday show the impact of Donald Trump’s 145 per cent tariff on Chinese goods, with China’s exports to the United States falling 21 per cent in April compared to a year ago. But China’s overall performance was better than expected, with total exports rising by more than 8 per cent, a lot better than the 2 per cent most analysts predicted.
Exports to the European Union rose by 8 per cent while goods shipped from China to countries in southeast Asia leapt by almost 21 per cent. Imports fell 0.2 per cent in April, reflecting weak domestic demand, but the drop was much smaller than the almost 6 per cent predicted by analysts.
The figures will offer comfort to both sides as negotiators from China and the US prepare to meet in Geneva on Saturday for the first time since Mr Trump imposed the tariffs. The sharp fall in exports to the US shows that the tariffs are having an impact but China’s strong overall performance reinforces Beijing’s assertion that alternative markets can cushion the blow.
China has played down expectations ahead of Saturday’s meeting, when vice premier He Lifeng will meet US treasury secretary Scott Bessent. Beijing insists that the meeting came at Washington’s request and that Chinese negotiators are cautious and sceptical about US intentions.
“After careful evaluation of these US overtures and on the basis of fully considering global expectations, China’s interests, and the appeals of US industry and consumers, China has decided to re-engage the US,” a spokesman for the Chinese Ministry of Commerce said.
“If the US wants to talk, our door is always open. But if you say one thing and do another, or even attempt to use talks as a cover to continue coercion and extortion, China will never agree, let alone sacrifice its principled position and international fairness and justice to seek any agreement.”
Will DoorDash takeover of Deliveroo mean better pay and conditions for gig economy workers?
Mr Bessent said this week that the 145 per cent US tariff on Chinese goods and China’s 125 per cent tariff on US imports was an effective embargo and was unsustainable. And Mr Trump told reporters in the Oval Office on Thursday that the current level of tariffs was too high and had to come down.
Mr Trump also said that the meeting should be substantive rather than simply setting the table for a further meeting, adding: “I think we’re going to have a good weekend with China”. The New York Post reported on Friday that US officials are considering cutting the tariff on Chinese goods to between 50 per cent and 54 per cent.
China, which raised its tariffs on US goods in response to Mr Trump’s increases, would lower them in response to any cut offered by Washington. Such cuts would represent an important de-escalation in the dispute, making trade between the world’s two biggest economies possible, although still expensive.
Mr Trump hinted that he could call Xi Jinping next week if the talks in Geneva go well, a move that would delight the markets. But a deal to end the trade war will take longer and as long as the level of tariffs remains unpredictable, the chilling effect on trade will endure.
