Trade Data Monitor

Author: John Miller

  • China’s New Record: Over 1M Cars Exported in a Month

    China’s New Record: Over 1M Cars Exported in a Month

    China released eye-popping June trade numbers on Tuesday. “A bit insane,” said Brad Setser of the Council of Foreign Relations, on X.  Overall, Chinese exports increased 27% year-on-year to $412.4 billion. Imports expanded even more, by 36% year-on-year, to $286.8 billion. 

    Chinese officials attributed the spike to the new artificial intelligence economy. “With the rapid growth of AI, our imports and export of products in this field are robust,” Wang Jun, a vice minister for customs, told reporters.

    The trade statistics back up these claims. Exports of high-tech products increased 52.4% to $118.8 billion. 

    Analysts agreed. “Trade values took another big leg up in June,” Capital Economics said in a note. “This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom. But even putting that aside, foreign demand for Chinese goods remains robust.”

    Part of the surprise is that China’s wider economy isn’t booming like it was earlier this century. Economists expect Chinese GDP to increase 4.5% in the second quarter, down from 5% in the first. The U.S.-Iran war, which has closed the Strait of Hormuz, an essential oil corridor for China, is another factor of uncertainty. 

    So AI is the magic bullet (for now) but it was another high-tech product that set a record Tuesday: cars. 

    China exported 1.069 million cars, up 72.7% from the same month in 2025. That’s the first time it’s recorded a seven-figure tally in a single month. For the 12 months of 2025, China exported 8.4 million vehicles, up from 1.7 million in 2020, and 795,615 in 2010. 

    Chinese officials were quick to point out China’s strength in the electric vehicle market. Wang, the customs official, noted that the world’s “low-carbon transition” had led to an increase in EV consumption and imports from China. 

    And it is increasing, although in 2025, EVs accounted for just 2.2 million, or 26.3%, of China’s total car exports. 

    China now has the world’s most enviable auto industry. In total, it exported $110.4 billion of cars in 2025, second only to Germany at $176.8 billion. That’s a more than ten-fold increase from 2020, when it exported $9.9 billion, ranking 16th in the world, behind France, Sweden, and Slovakia. 

    It’s the tech edge that explains how China’s exports to the U.S. increased 13.9% in June to $43.5 billion. The consumer manufacturing economy, as we’ve been saying for a few years, is not what it once was. Shipments of footwear slipped 1.1% in June to $4.1 billion. Sales of toys dropped 6.4% to $3.4 billion. 

    Sales to the rest of the world increased more. Exports to ASEAN countries rose 34.6% to $78.3 billion, and shipments to the EU rose 18.6% to $58.3 billion. Exports to Africa increased 28.1% to $25.1 billion. 

    On the import side, China’s demands were driven by its high-tech needs and by consumption of commodities like U.S. and Brazilian soybeans, oil and gas from the Middle East, and copper and iron ore from Australia and Latin America. 

    Shipments from the EU rose 9.2% $25.4 billion. Imports from the U.S. increased 25.8% to $14.6 billion. Purchases from ASEAN nations rose 26.3% to $41.2 billion.

    Commodity purchases are why imports from Africa increased 39.9% to $14.4 billion, and imports from Latin America expanded 36.5% to $27.4 billion. A big part of that was shipments from Brazil, which increased 32.5% to $14.4 billion. 

    The U.S.-Iran war, and the Strait of Hormuz closure, has caused China to change its energy consumption strategy. 

    China cut imports of crude petroleum in June 41.3% to 29.3 million tons but increased natural gas imports 108.6% to 10.9 million tons. 

    By comparison, imports of high-tech products increased 57.8% to $106.7 billon. 

    China has been reducing its reliance on fossil fuels this year. For the first four months of 2026, according to TDM data, China imported $990.3 billion, of which $146.2 billion, or 14.8%, were fossil fuels.

    In 2025, China imported $2.6 trillion, and the percentage of fossil fuels was 17.1%. (By comparison, the EU’s percentage of fossil fuel imports was 16.4% of its $2.8 trillion in imports in 2025.)

    In 1995, the first year for which TDM has Chinese historical data, China imported $132.1 billion. Only $5 billion, or 4%, was fossil fuels. 

  • Is The U.S.-China Trade War Over?

    Is The U.S.-China Trade War Over?

    U.S.-China Summit This Week

    When Presidents Donald Trump and Xi Jinping meet in Beijing, trade, for once, won’t be the primary topic. Among more severe crises in play are the U.S. war with Iran, the rise of artificial intelligence, and China’s desire to annex Taiwan. After the Trump’s imposition of triple-digit tariffs last year, Beijing and Washington agreed to a one-year trade truce in October that imposes tariffs averaging 47% on Chinese exports to the U.S. and around 30% on goods going the other way. 

     China Boosts Exports

    This weekend, China said its exports to the rest of the world had increased 14.1% year-on-year to $359.4 billion. That was a surprisingly strong performance for a Chinese export economy that’s struggled to find its footing this decade. In March, exports increased only 2.5%, and a group of economists recently interviewed by the Wall Street Journal summoned an estimated expansion for April of only 8%. China’s manufacturers had suffered more than most from the conflict in the Middle East and the difficulty navigating the Strait of Hormuz.

    Trade to the U.S. Recovers

    Exports to the U.S. rose 11.4% to $36.8 billion. In the first quarter of 2026, by contrast, shipments to the U.S. dropped 16.3% to $96.7 billion. What’s going on here? In part, it signals a stabilization after the hard dip caused by tariffs a year ago. April 2025 is when Chinese exports to the U.S. really got hit: That month Chinese exports to the U.S. dropped 21.1% to $33 billion. By comparison in March 2025, they increased 8.7% to $40 billion. With a lower baseline, expect Chinese exports to the U.S. to stay flat on increased slightly year-on-year. To be sure, last year, despite the slowdown in trade with the U.S., China set a record with a $1.2 trillion trade surplus. 

    But the April numbers suggest that the U.S. could be losing leverage. Before Trump, the U.S. had imposed some of the lowest tariffs in global economic history, the result of its postwar liberalization philosophy. The U.S. under Trump has used the negotiating power offered by those low tariffs to exact concessions from enemies and friends. Now, however, “China looks to have more leverage,” Capital Economics wrote in a report. “Higher tariffs haven’t stopped China’s exports from continuing to surge over the past year, and Beijing has showed that it is prepared to wait out U.S. pressure.”

    Semiconductors and Cars

    The rest of China’s trading partners gobbled up cars, semiconductors, and other high-tech goods the country is currently manufacturing. Shipments to the European Union increased 13.6% to $53 billion, and sales to ASEAN nations rose 15.4% to $69.5 billion. Exports to Brazil increased 37.1% to $7.8 billion. 

    Exports of “automatic data processing machines and parts thereof” increased 47.7% to $23.8 billion. Shipments of high-tech products spiked 39.3% to $104 billion. Exports of motor vehicles increased 44% to $16.1 billion. By contrast, sales of ag products increased 3.8% to $8.8 billion. 

    China’s Buying

    China’s economy imported $274.6 worth of goods in April, up 25.3% year-on-year, after rising 27.8% in March. The Wall Street Journal economists had predicted a rise of 16%.

    China is importing components for its booming tech industry. Imports of high-tech products rose 42.1% to $95.9 billion. Imports from the EU increased 14.6% to $23 billon, purchases from the U.S. increased 9.4% to $13.7 billion, and shipments from ASEAN countries rose 29.1% to $42.7 billion. Imports from India rose 32.3% to $2.3 billion. But there are signs that the Strait of Hormuz closure is having an impact. Imports of crude petroleum, most of it from the Middle East, dropped 19.9% to 38.5 million tons. Imports of natural gas, from countries like Russia, increased 83.1% to 8.4 million tons.

    As always, when he arrives in Beijing, President Trump will ask China to buy more American goods. With duties already on the board, and courts in the U.S. now limiting his tariff power, the trade war, if not over, has become much harder for the U.S. to fight. 

  • Vietnam’s Superpower: Versatility

    Vietnam’s Superpower: Versatility

    Vietnam’s Moment in (Trade) Time

    The wars in Iran and Ukraine, and trade turmoil around the world, especially involving the U.S. and China, have obscured what continues to be one of the essential trade stories of the century: Vietnam’s export growth.

    The Asian country of 102 million has staged an epic comeback since the 1970s and 1980s, and has now climbed within the top 20 rankings for world’s top exporters, surpassing economic titans like Australia, India and Brazil.

    In 2025, Vietnamese exports increased 21.1% to $466.6 billion. That’s more than twelve times the amount exported in 2019, the first full year for which TDM has data. Vietnam exported $38 billion worth of goods that year.

    Vietnam’s Superpower: Versatility

    The secret is the complex product mix of Vietnam’s export capacity, as demonstrated by statistics from Trade Data Monitor and a report published in February by Harvard.

    Vietnam exported over a billion dollars worth of goods in 28 different export categories. For example, Vietnam exported a billion dollars worth of headgear. It also exported almost $7 billion of seafood, $15.7 billion of furniture, and $24.8 billion of shoes.

    However, it’s Vietnam’s integration into the global electronics and high-tech supply chain that has really goosed Vietnam’s numbers. The country exported $161.9 billion worth of electronics and high-tech goods in 2025, making it the seventh biggest exporter in the world, behind only China, Taiwan, South Korea, the U.S., Singapore and Germany.

    Kudos from Harvard

    That’s impressive for sure, but it’s the variety and complexity of Vietnam’s export machine that led by Harvard in February to put Vietnam on the same level as China in driving growth.

    “Vietnam and China are positioned to lead global growth,” the report said. “The findings forecast that economies that built complex productive capabilities will drive the world’s economic expansion for the coming decade, even as riding trade tensions threaten to disrupt their growth trajectories.”

    Vietnam, the report said, is expected to “lead all nations in GDP per capita growth, followed closely by China, a remarkable forecast for the world’s second-largest economy.” Vietnam’s GDP per capita is project to be around $5,000 in 2025, and is expected to rise to reach $8,500 by 2030.

    The two countries will lead global growth because they have “diversified their production into more complex sectors,” said Ricardo Hausmann, director of Harvard’s Growth Lab.”

    Selling Around the World

    It’s not just the products that span a wide variety of possibility. It’s also the markets. In 2025, Vietnam exported over a billion dollars of goods to 36 countries around the world, including nations as different from each other as Sweden, Turkey, and Laos.

    Shipments to the U.S. rose 31% to $148.9 billion. The second biggest export destination was China, worth less than half of that, up 17.8% to $64.4 billion. After China came South Korea (up 16.8% to $29.5 billion), Japan (up 12.3% to $27.5 billon) and the Netherlands (up 4.7% to $13.7 billion).

    Vietnam is Also Buying

    Vietnam’s total imports rose 18.7% to $483.5 billion. The country imported over a billion dollars worth of goods from 30 countries. Imports from China bumped up 28.2% to $191.5 billion. Shipments from South Korea increased 9.3% to $63.9 billion. Imports from Taiwan increased 46.3% to $33.8 billion. While the biggest export market, the U.S. is the fourth biggest source of imports. Vietnam imported $31.4 billon from the U.S., up 16.3% from 2024. The fifth biggest source of imports was Japan. Vietnam imported $26.5 billion worth of goods from Japan, up 12.8%.

    Vietnams’s top import in 2025 was electronics (up 35.2% to $186.7 billion). Almost half those imports came from China. Vietnam also imported $91.6 billion in parts used to make electronic integrated circuits. Most of those came from three countries: South Korea, China and Taiwan.

  • How AI Is Driving Global Trade

    How AI Is Driving Global Trade

    Lower Growth in China 

    In early March, Chinese leadership set their lowest gross domestic product growth target since 1991, forecasting a 4.5% to 5% expansion for its economy in 2026. 

    This week, China reported a 21.8% year-on-year increase in exports for January and February to $656.6 billion. To avoid distorted numbers because of Chinese New Year, the government in Beijing always reports combined trade data for the two months of the year. 

    This big increase handily beat analyst predictions, and, after a modest 6.6% year-on-year bump in December, defied aggressive action by the U.S. to curb commerce with China. 

    Part of the Chinese trade resurgence is due to an intentional strategy by Chinese policymakers to goose exports by cutting prices and finding new markets. Exports to ASEAN countries rose 29.4% to $112.6 billion, while shipments to the EU expanded 27.8% to $101 billion.

    The AI Global Trade Economy

    Another reason for the increase is the booming tech economy based around intense investments in artificial intelligence technology. China’s exports of integrated circuits, a category which includes the semiconductors used to power AI systems, increased 72.6% to $43.3 billion. Imports of those circuits jumped 39.8% to $78.2 billion.

    The AI buildout is happening around the world, and it’s changing the composition of the Chinese tech economy. Suppliers once flocked to China to manufacture finished consumer goods like smartphones. Now, they’re more likely to make electronic and industrial parts in China that then get finished in other countries. That’s why exports of mobile phones dropped 8.3% to $17.1 billion, even as overall shipments of high-tech products rose 26.9% to $167.2 billion. 

    One consumer product China is still dominating: Cars. Chinese exports of motor vehicles kept on vrooming upward, rising 57.9% to 1.5 million units. By value, they increased 67.1% to $27 billion. 

    China’s surplus only appears to be growing, raising the stakes around the world for protectionist policies. In 2025, China ran a record $1.2 trillion surplus. 

    U.S.-China Trade in Flux

    In one respect, the U.S. strategy to restrict trade is working: Exports to the U.S. dropped 11% to $67.2 billion. In February, the Supreme Court ruled that the Trump administration was illegally using an emergency power to apply tariffs on foreign imports. In response, Trump promised to a standard 10% tariff that he will eventually bump up to 15%. That could end up helping China, as it lowers their tariff rate relative to other countries. 

    However, China has been ramping up exports to other countries. Sales to France rose 31.9% to $8.5 billion, exports to Italy leapt 36.4% to $9.9 billion, and shipments to Russia rose 22.7% to $18.3 billion. 

    China has abandoned the low-tech staples of its early economic development, but with so much capacity, there have been occasional resurgence in the manufacture and exports of some categories. Exports of furniture, for example, rose 24.7% to $12.4 billion. However, shipments of toys ticked up only 1.5% to $5.1 billion. 

    The Importance of the Chinese Consumer

    Despite the low growth expectations, total imports increased 19.8% to $443 billion. China’s consumers have more appetite, and money, for purchasing foreign goods. Policymakers in Beijing have been focused on getting consumers in China to spend and invest more. At the same time, exporting manufacturers need raw materials and parts for making their goods. Imports of high-tech products increased 27.7% to $139.8 billion. 

    One thing is certain: They’re not buying American. Imports from the U.S. fell 26.7% to $19.4 billon. Trump is due to visit China at the end of March. 

    By comparison, imports from the European Union increased 11.7% to $41.2 billion, and purchases from ASEAN nations rose 12.9% to $63.9 billion. One region increasingly benefitted from China’s importing strategy is Latin America. Imports, mostly of commodities like copper, iron ore, and soybeans, jumped 28.9% to $46.5 billion. Notably, imports from France rose 28.2% to $6.1 billion, and imports from Russia increased 4.1% to $20.8 billion. 

    One item China will likely have to import more of is petroleum, as the war in Iran scrambles supply routes around the Strait of Hormuz. In the first two months, China hiked imports of crude 15.8% to 96.9 million tons. 

  • Global Trade is Moving On — Without the U.S.

    Global Trade is Moving On — Without the U.S.

    One way of looking at China’s trade economy in December and for the full 2025 year is its export surge, amplified by a weak currency, deflation at home, and inflation in most of the rest of the world. China pumped up total monthly exports 6.6% to $357.8 billion in December from $335.6 billion over the same period in 2024. 

    Here’s another angle: Washington’s efforts to crimp Beijing’s industrial sector have resulted in diminished U.S.-China trade, but even bigger Chinese surpluses with the rest of the world, and evolutions in global trade that are simply leaving America behind. For the full year, China exported $3.8 trillion worth of goods. Minus imports, that made for a total surplus of $1.19 trillion, the biggest in recorded economic history. 

    Chinese officials themselves have drawn direct links between U.S. policy and its surplus, saying in effect that without tariffs, Beijing would have bought more goods from the rest of the world. “Some countries have politicized economic and trade issues and restricted exports of high-tech products to China for various reasons; otherwise, we would have imported even more,” Wang Jun, a Chinese trade official, told reporters Wednesday. 

    According to the Petersen Institute for international economics, U.S. tariffs on Chinese exports average around 47%, while China’s average tariffs on US exports are around 32%.

    The Chinese export juggernaut needs markets like nature abhors a vacuum, and it’s found new landing places for its voluminous container ships. Exports to the European Union increased 11.5% in December to $51.9 billion. Exports to Germany increased 13% to $11 billion. By comparison, exports to the U.S. fell 30.2% to $34.2 billon. We are seeing the wheels of human economic history turn in real time. Global trade is still inching upward every year. The rest of the world is getting on with it, leaving the U.S. behind. While ports on the East and West coasts slow their activity, they’re busy in Asia, Europe, Latin America and Africa. Exports to ASEAN nations increased 11.3% to $66.4 billion, including a 20.4% jump to Vietnam to $18.9 billion; shipments to Latin America rose 9.8% to $25.7 billion; and sales to India increased 22.1% to $12.8 billion.  

    The story of global trade right now is geopolitics. It’s the jolt of the U.S. away from its post-war free trade consensus. There is another story we’ve discussed here that is less surprising but still ongoing. It’s the move of China and other Asian countries up the value chain, away from toys and shoes and into tech and cars. At the same time, countries like Egypt, Bangladesh and Cambodia continue to build up their apparel and textile exports. 

    In December, Chinese exports of high-tech products increased 16.7% to $93.7 billion. Sales of motor vehicles increased 73.2% to 994,000. By value, they rose 71.7% to $17.1 billion. Exports of toys fell 19.4% to $2.7 billion. Shipments of footwear dropped 17.4% to $3.9 billion. 

    On the import side, China ramped up purchases 5.7% to $243.6 billion from $230.5 billion. The relationship with the EU seems more two-sided than in the past. Imports from the EU rose 17.9% to $26.9 billion, while purchases from the U.S. plummeted 28.6% to $10.9 billion. Imports from Germany increased 13.6% to $8.9 billion. Imports from Latin America increased 26.8% to $24.4 billion. Imports from India rose 56.5% to $2.2 billion.

    Buying more from Europe and Latin America was also at the expense of some Asian neighbors. Imports from ASEAN countries fell 5.1% to $35.7 billion. Even imports from Vietnam were flat at $9.5 billion. 

    Imports of high-tech products rose 13.6% to $82.6 billion. Purchases of soybeans increased 4.7% to $3.9 billion. China still needs a protein supply, and it’s getting it from Brazil instead of the U.S.

    One sign the Chinese economy is doing just fine: China ramped up purchases of natural resources. It increased quantities of imports of iron ore by 6.5%, copper 7.3%, coal 11.9%, oil 17.4%, and natural gas 90.2%.

  • TDM’s Top 10 Trade Trends to Watch in 2026

    TDM’s Top 10 Trade Trends to Watch in 2026

    Happy New Year. While we wait on the Supreme Court to rule whether the Trump administration is entitled to apply tariffs on national security grounds, global trade grinds on. We at Trade Data Monitor are paying attention to what’s happening via the prism of official trade statistics. It’s a radically different world than when I started covering trade for the Wall Street Journal 20 years ago. The biggest story is still in tech, where the economy is being transformed by investment in chips and other electronics used to make artificial intelligence systems. Shut out of the U.S., many Chinese exporters are finding new markets in Europe. Beijing is not giving up its export-dependent growth model, which in 2025 propelled the world’s first-ever trillion-dollar trade surplus. Via our system for reverse engineering trade data, we can discern that Russia’s import demand is shrinking. Vietnam is still climbing the economic ladder, thanks to an export portfolio that includes staples like toys and shoes, but also high-value electronics. Most of the world has not given up on trade. In October, global container volumes increased 2.1%. However, the U.S. is an outlier. According to Bloomberg, the U.S. saw an 8% contraction in inbound shipments. Although President Trump threatened much higher levies, the U.S. effective tariff rate is “only” around 15%. That’s its highest level since the 1930s, and it’s the main reason the WTO is now forecasting 0.5% growth in global trade in 2026, instead of 1.8%.Here are our top trade trends to watch in 2026.
    1.   The Asian Chip MiracleThe chip market is expected to reach around $750 billion in 2026 and hit $2 trillion by the early 2030s. In its latest incarnation that trend is being led by Asia. Eight of the world’s top 10 exporters of chips, classified under HS8541 and HS8542 are Asian. Only the U.S. and Germany crack the top 10. 
    Thanks in part to the chip industry, and parallel industries in batteries, engines and electronics, the electric vehicle industry is thriving. Slowly, the world’s road and filling stations are being rewired. In country after country, electric car imports have been increasing.  One consequence is booming trade in the critical minerals, like cobalt, manganese and nickel, needed to build electric cars and batteries. We’ll explore that trade in our February newsletter. 
    2.   China Finding Markets in EuropeWith the U.S. throwing up roadblocks, Chinese exporters have been finding markets in Europe. That’s triggered a crisis for European domestic manufacturers, who are now having to compete with the China price Americans have turned down.
    3.   Where is U.S.-China Trade Headed?The future of the U.S.-China trade relationship seems uncertain at best. When we added up total trade between the two behemoths, the only sector has grew in 2025 was aircraft. The U.S. shipped $12.5 billion of aircraft and aircraft parts to China in the first nine months of 2025, up 45% from the same period in 2024.
    4.   How Vietnam is Winning Global TradeAt TDM, we’ve been talking about Vietnam’s promise for a decade, so we’re not surprised to see its strong export numbers. The remarkable thing about Vietnam isn’t that it has become an export machine, it’s that its manufacturing capacity has increased across so broad a base. 5.   Russia’s Shrinking Import DemandRussia still isn’t publishing trade statistics, but thanks to the breadth of TDM’s database, we can look at which countries are shipping to Russia. Those exports to Russia are mostly shrinking, an indication of the battering Russia has been taking from the war. The IMF and other institutions predict Russian GDP growth of only around 1% in 2026. 
     6.   U.S. Imports from MexicoThe biggest beneficiary of the U.S.’s trade war with China has been Mexico. Although the two countries, and Canada, are now renegotiating the USMCA, businesses have had confidence they can manufacture in Mexico and ship north. Mexico has been suppressing data, but U.S. import statistics paint a picture.
    7.   Indian ExportsNow with the world’s biggest population, India has now overtaken Japan as the world’s fourth biggest economy, behind the U.S., China and Germany. Its top market: the U.S., followed by UAE and the Netherlands. 
    8.   Trade Case Study: EgyptTrade coverage focuses on the big countries, but we’ve been studying smaller players, and one interesting case study is Egypt. It’s been boosting apparel exports, a sign of a country’s increasing prosperity and competitiveness on export markets. In 2025, Egypt clocked the biggest increase in apparel exports, shipping out $2.6 billion in the first nine months of 2025, 30.7% more than the year before. The second highest increase was registered by Cambodia at 16.9%, and no other country improved by double digits. 9.   What States’ Ports and Economies Are Thriving MostAmerica is a huge continental economy with dozens of distinct economic regions and sea- and airports. We sorted every state by increase year-on-year in exports from the place it’s leaving the U.S., over the first nine months of 2025. Texas and California are still the biggest exporters overall, but New York leads the race in year-on, because of its trade in physical gold. Arizona ranks second because of its electronics trade with Mexico. Third is Indiana, thanks to its exports of hormones to Italy. 10.   U.S. Wine ExportsA retaliatory tariff and a “Buy Canadian” movement have dented U.S. wine exports to its northern neighbor. Instead, U.S. producers are finding replacement markets in Germany, South Africa and Japan. 
    5 News Stories To Understand This Moment in Global Trade 📰
      
    WSJ: A Shrimper, a Carmaker, a Lawyer: How the World Tackled Trump’s Trade War: A fascinating mini-survey of how businesses around the world are being impacted by tariffs.Euronews: In 2025, global trade cracked as Europe hurt by US tariffs and new China shock: An important perspective, from Europe, on how trade flows have been rerouted toward the Old World. Global Trade: U.S. Tariffs to Cost Container Carriers $.2 billion by 2026, Alphaliner Warns: The U.S. isn’t just imposing tariffs on goods, it’s putting duties on ships. AP: Trump launched global tariff wars in 2025. Here’s a recap of his trade actions this year: A useful recap of U.S. trade duties in 2025. BBC: Peru’s ‘fast and furious’ blueberry boom: An optimistic story about global trade, chronicling how Peru has become the world’s biggest blueberry exporter.
    What We’re Reading 📚
      With tariffs still beating down optimism over global trade, it’s easy to get dragged down by the political story of modern commerce. What’s lost is the triumph of human ingenuity represented by the global logistics industry figuring out how to move goods from any place in the world to any other place. My former Wall Street Journalcolleague Christopher Mims tells that story in his 2021 book Arriving Today: From Factory to Front Door—Why Everything Has Changed About How and What We Buy. In an illustrative anecdote, Mims tells the story of a USB charger. After leaving a factory in Vietnam, Mims recounts, the charger “has traveled more than 14,000 miles, across 12 times zones, by truck, barge, crane, container ship, crane, and truck again, all before it trundled down a few hundred yards of conveyor, flitted about on the back of a robot, and was ferried again on, all told, miles more conveyor and at least two more trucks, before being hand-carried to someone’s front door.”

  • Chinese Exports Down 1.1% in October

    Chinese Exports Down 1.1% in October

    The Chinese export juggernaut finally started to show the impact of protectionism and weaker Western consumer markets in October. 

    A week after Presidents Trump and Xi settled a new trade deal that cut tariffs and put off their trade war for a year, China reported a 1.1% year-on-year drop in exports to $305.3 billion. 

    To be sure, this is only one month. China has shown resiliency thus far in 2025, finding other markets as Washington puts up obstacles to its exports. Shipments to the U.S. have declining since the spring. In October, exports to the U.S. fell 25.1% year-on-year to $34.9 billion. But sale to the European Union, especially Germany and France, had been holding steady. In October, surprisingly, they rose only 1%, to $43.9 billion.

    Analysts had predicted a 3% overall increase in exports, meaning that China missed its target by 4 percentage points. 

    Much of the recent analysis has focused on protectionist trade policies driven by populist politics. Although they have caused headaches for businesses by creating a climate of uncertainty, real tariffs have been lower than headline duties. Instead, a big part of the leveling off of Chinese exports has been caused by a change in its export composition, and in consumer demand in the U.S. and Europe. That’s why there’s been dramatic drops in shipments of consumer goods where China used to dominate. In October, for example, toy exports fell a whopping 31% to $2.5 billion. Shoe sales dropped 20.9% to $2.7 billion. Suitcase exports declined 25.7% to $2.1 billion. It’s not just the low-tech stuff. The number of mobile phones shipped dropped 14.2% to 70.6 million. Exports of high-tech products increased a modest 1.8% to $83 billion. 

    Meanwhile, China is dominating new markets, especially in the automotive sector. Car shipments boomed again in October, rising 34.1% year-on-year to $14.3 billion. In Europe and the U.S., China still has to contend with strong domestic manufacturers. These exports tend to go elsewhere. China’s top 10 car markets so far this year: UAE, Russia, Belgium, UK, Mexico, Australia, Brazil, Saudi Arabia, Spain, Kazakhstan.  

    The bright spots: In October, shipments to ASEAN nations rose 11.1% to $53.3 billon; exports to Vietnam increased 22.4% to $16.6 billion. Exports to Africa rose 9.4% to $17.7 billion. Exports to Latin America increased 2.2% to $24.1 billion. Exports to Russia, however, plummeted 22.5% to $8.5 billion. 

    The slowdown in trade poses a challenge for Chinese policymakers. “As exports rapidly lose steam and retail sales show signs of deterioration, we see increasing pressure on Beijing to step up policy support to stabilize growth” until the end of 2025, Nomura wrote in a note.

    Domestically, there are certainly questions. 

    In October, imports rose only 1% to $215.3 billion, raising questions about domestic demand. Imports of agricultural products rose 7.1% to $17.2 billion. Purchases of high-tech products rose by 3.1% to $69.9 billion. 

    Imports from the U.S. declined 22.5% to $10.2 billion. Imports from the EU rose 4% to $22.1 billion. Imports from ASEAN countries fell 4.6% to $32.5 billion. Purchases from Africa increased 5.4% to $9.7 billion. Imports from Latin America, goosed by soybean sales, were up 15.1% to $21.5 billion. Imports from Russia rose 0.9% to $11 billion. 

    Beijing has reported GDP growth of 5.2% over the first nine months of the year, and seems on track to hit the government’s 5% goal for the year. 

    One good sign is the country’s appetite for industrial commodities: Imports of copper and iron ore rose year-on-year in October, as did purchases of natural gas and crude oil. Imports of coal continued to fall sharply.

  • Is Global Trade Too Strong for Tariffs?

    Is Global Trade Too Strong for Tariffs?

    Global Trade Can Take a Punch

    This month, markets have swerved to adjust to the threat of new U.S. tariffs on Chinese imports. Yet, global trade keeps finding a way. In September, although shipments to the U.S. plummeted, China’s monthly exports increased 8.3% year-on-year to $328.6 billion.

    One way of looking at the stubborn performance of China’s export machine, and the global trading system, is that the swift emergence of an infrastructure that can function without the U.S.. “This resilience shows that China has strengthened trade with the rest of the world amid US protectionism,” ING Bank economist Lynn Song wrote in a published note Monday.

    To be sure, both China and the U.S have talked up the possibility of more radical constrictions on trade that would put more of a dent in the global economy, but so far this year, trade has been surprisingly robust. 

    The Supereconomies

    At the World Trade Organization’s forum last month, there was talk of how a multilateral trade deal might be conceived even if Washington didn’t join the party. But, despite new duties, even the U.S. is having a decent year trading with the rest of the world. In the first seven months of 2025, U.S. imports increased 11% to $2.1 trillion, while exports rose 4.6% to $1.2 trillion. 

    What’s going on here? 

    The simplest explanation is that the world’s two supereconomies are both so populated and wealthy that businesses can find opportunities to buy and sell despite governments’ new tax burdens. 

    To boot, China and the U.S. are less and less intertwined with each other, meaning that their trade dispute has less of an impact on the global economy that it would have a decade ago. 

    Ten years ago, in the first nine months of 2015, the U.S. accounted for 18%, or $303.8 billion, of China’s $1.7 trillion of exports. This year, in the first nine months of 2025, the U.S. was worth only 11.4%, or $317.2 billion, of China’s $2.8 trillion of exports. In September, exports to the U.S. dropped 27% to $34.3 billion. 

    The World is a Big Place

    To replace the U.S. markets, Chinese-based manufacturers, many of which are connected to U.S. and European corporations, have been finding substitute markets. In September, Exports to ASEAN countries increased 15.8% to $53.7 billion. Particularly, exports to Vietnam rose 24.6% to $16.7 billion. Exports to the European Union rose 14.2% to $48 billion. 

    One place that is becoming less valuable to Chinese exports: Russia, where exports dropped 21% to $8.9 billion.

    China’s economy has faced its own set of challenges, including a credit crisis and housing bubble. But in September, total imports increased 7.4% to $238.1 billion, despite imports from the U.S. falling 16.1% to $11.5 billion. Imports from the EU rose 9.5% to $25.2 billion, compensating for imports from ASEAN nations slipping 0.8% to $36.5 billion. 

    The Strength of Heavy Industry 

    The real reason for the boost in imports is an increase in purchases of industrial commodities. Imports of copper increased 6.4% to 2.6 million tons. Iron ore purchases rose 11.9% to 116.3 million tons. These came from commodity-rich nations in Africa and Latin America. Imports from Africa increased 22.5% to $10.6 billion, and purchases from Latin America rose 18.6% to $23.3 billion. China has been reducing its intake of fossil fuels. Coal imports in September fell 3.3% to 46 million tons. 

    All that metal is getting turned into a car industry that have overtaken the U.S. In September, automobile exports increased 10.8% to $12.8 billion. 

    In many cases, companies are overcoming protectionism for a simple reason: They can afford it. For example, in September, China’s exports of rare earths declined 4.3% by quantity, to 4,000.3 tons. By prices, they roughly doubled in value to $60 million. It’s often said that rare earths are essential for modern electronics, and that’s true, but the quantities required are miniscule, and even when supply gets tightened and prices spike, affordable.  

    There are real signs that tariffs and faltering consumer demand are denting exports of manufacturing staples. Exports of toys, for example, fell 28% to $2.9 billion. Sales of shoes fell 13.2% to $2.9 billion. Exports of household appliances dropped 9.6% to $7.7 billion. 

    One good sign for global trade: exports of ships increased 24% to 543 from 438. By value, sales rose 43% to $6.6 billion. Ships are becoming more valuable because firms need them.

  • Global Coal Trade is Finally Faltering

    Global Coal Trade is Finally Faltering

    China Cuts Coal Imports

    For years, as governments around the world embraced clean energy technology, coal trade held steady because China was still buying. As the rest of the world turned away from coal, China boosted imports to power its booming electrification, and a vibrant new industry of electric vehicles and batteries. In 2024, it imported 352.2 million metric tons of coal, up 79% from 197 million in 2019. 

    This year, China is finally giving up the rock. In July, its purchases of coal dropped 22.9% year-on-year by volume to 35.6 million tons, while boosting imports of other energy sources. Imports of natural gas rose 82.4% to 10.6 million tons, and imports of crude petroleum oil increased 11.5% to 47.2 million tons.

    China diminished imports from its top sources: Russia, Australia, Mongolia and Indonesia. The only country it increased coal imports from was Canada, boosting imports 13.3% to 5.4 million tons. 

    So what is going on? China has been producing more coal domestically and also developing more alternative energy sources such as wind and solar. It’s also transforming its economy to become less dependent on global trade, by ramping up production in assets like coal, where it has abundant resources. Exports of fertilizers rose 134.5% to $2.1 billion, and exports of agricultural products increased 1.6% to $8.4 billion.

    Adjusting to U.S. Tariffs

    The switch is just one of the ways China has been adjusting to duties from its biggest export market. How the world adapts to a newly protectionist U.S. is one of the most important economic stories of the decade. On Thursday, August, 7, Washington slapped duties from 10% to 41% on hundreds of billions worth of imports from dozens of countries. 

    Also on Thursday, China said its overall goods exports increased 7.2% in July to $321.8 billion, surpassing the expectations of analysts who’d predicted growth of around 6%. Exports to the U.S., however, fell 21.6% to $35.8 billion, while imports from the U.S. shrank 18.6% to $12.1 billion. 

    Current U.S. tariffs on Chinese imports vary, but are generally around 45%. The U.S. has also eliminated the de minimis exemption, which allowed companies to ship goods worth under $800 into the U.S. tariff free. 

    Negotiators from Washington and Beijing are currently negotiating a new agreement governing tariffs between the two countries. The two sides have set an August 12 deadline, after which they’ve threatened to impose duties of over 100%, which would cripple trade between the world’s dominant trading economies.

    Destination Europe

    One surprising development has been how much China has managed to redirect its exports into the European Union. Officials from Brussels visited Beijing last month. Shipments into the EU increased 9.3% in July to $50 billion, even as imports from the EU declined 1.4% to 24.5 billion. 

    Less surprisingly, exports to ASEAN nations rose 16.8% to $54.6 billion, led by shipments to Vietnam increased 28.1% to $17.1 billion. Imports from ASEAN nations fell 5.4% to $31.4 billion. Exports to Russia continued their decline, falling 9% to $9.1 billion. 

    Supply Chains or Domestic Demand?

    China’s total imports rose 4.1% in July to $223.5 billion. The increase in imports was driven by increases in commodity shipments from Africa, up 20.3% to $10.6 billion, Latin America, up 12% to $22.1 billion, and India, 26.4% to $1.7 billion. 

    Just as the new American dream appears to be a self-contained continental market, so it goes for China. It’s now a country that makes everything. All it needs is raw materials. Imports of agricultural products rose 5.4% to $18.7 billion. One essential question is how much the trade is focused on supplying the domestic market, and how much is part of global manufacturing supply chains. 

    Phone and Cars

    Shipments of high-tech products rose 4.3% to $78.1 billion. Exports of mobile phones, however, fell 21.8% to $7.5 billion, signaling that China could losing one of the mainstays of its export economy. In the first half of 2025, the U.S. cut smartphone imports from China 27.6% to $11.2 billion from tripling them from India to $11.6 billion. That might change as President Trump moves to slap duties on India. Imports of high-tech products rose 7.9% to $71.9 billion, and exports of chips and integrated circuits increased 29.4% to $17.9 billion. 

    When it comes to cars, China has already become a country that makes way more than it takes. Exports of motor vehicles rose 18.5% to $11.8 billion. Imports of motor vehicles dropped 42.1% to $2.5 billion. 

    Toy sales fell 3.2% to $3.5 billion. 

  • China Ramps Up Exports to Vietnam Amid Transshipment Worries

    China Ramps Up Exports to Vietnam Amid Transshipment Worries

    Made in Vietnam (or China)

    At a time when trade officials around the world are closely watching Vietnam’s evolving place in the global trading system, Chinese exports to the new Asian economic power in June boomed 23.8% year-on-year to $16.3 billion.

    The U.S.-China trade war has pushed attention of U.S. trade negotiators toward manufacturing powers such as Vietnam, Singapore and Malaysia. 

    Vietnam has had a trade deal with the U.S. for over 20 years. The country is now the U.S.’s sixth biggest source of imports, after Mexico, Canada, China, Ireland, and Switzerland. Vietnam is actually the fifth biggest source if you take away gold shipments from Switzerland. 

    Earlier this month, President Trump announced a new trade deal with Vietnam that includes 20% tariffs on U.S. imports from the Asian country. With one exception: 40% tariffs on imports from Vietnam that are “transshipped” from China. That set off an effort by Vietnamese trade officials to certify which goods made in their country are in fact domestic and not repackaged Chinese fare. 

    With shipments from China increasing so fast, they’ll have their work cut out for them, especially as the economic relationship appears to be growing more one-sided: China’s imports from Vietnam in June shrank 13.4% year-on-year to $7.6 billion. 

    China’s Resilient Export Economy

    The pressure of the trade war with the U.S. shows no signs of abating. Chinese negotiators now face an August 12 deadline to set new trade terms with the U.S.

    Overall, Chinese exports in June rose 5.8% year-on-year to $325.2 billion. Beijing is successfully weathering the storm: Current duties on Chinese imports vary by product but are at an average of around 55%, according to a recent social media post by President Trump. 

    Exports to the U.S. fell 16.1% to $38.2 billion. However, that decline was lower than the fall in May, and it’s been counterbalanced by an increase in sales to other countries. 

    The rebound in trade with Europe appears significant. Exports to the European Union rose 7.6% to $49.2 billion. Shipments to Germany increased 3.6% to $10.1 billion. Exports to Italy and France both rose by double-digit figures. European countries stand to benefit from the loss of export markets in the U.S. Buyers there can snap up excess production that can’t find a home in the U.S., and benefit from lower prices.

    Exports to Africa leapt 34.9% to $19.6 billion. Exports to ASEAN countries improved 17% to $58.2 billion. Exports to Brazil fell 8% to $6.1 billion. 

    The Russia Relationship

    After Russia invaded Ukraine in 2022, Beijing and Moscow forged a close trade relationship, but that appears to be crumbling. Russia shipped raw materials to China, and bought electronics, especially for the war effort. But in June, exports to Russia declined 16.2% year-on-year to $8.3 billion. Imports from Russia fell 11.2% to $9.3 billion. To be sure, a big part of the decline can be attributed to the struggles of Russia’s economy.

    Cars, Not Phones

    China’s main casualty of the trade war might be smartphones. Exports of mobile phones fell 8.8% to $7.4 billion. However, overall exports of high-tech products rose 7.3% to $78.1 billion. The Chinese export economy appears increasingly geared toward high-tech industrial goods, especially cars. Exports of motor vehicles increased 23% to $10.8 billion. Exports of ships leapt 23.7% to $4.5 billion. Shipments of agricultural products declined 6.2% to $8.1 billion. Exports of suitcases, textiles and footwear all continued their decline.   

    The Chinese Economy 

    Concerns remain about Chinese demand and the country’s domestic economy. In June, total imports increased only 1% year-on-year to $210.4 billion. 

    Imports from the U.S. fell 14.8% to $11.6 billion. Imports from the EU, however, notched up 0.6% to $23.3 billion, another sign of Brussels taking a different tack toward China than Washington. Imports of agricultural products increased 2% to $18.5 billon. Imports of high-tech products increased 10% to $67.7 billion. Imports of integrated circuits rose 11.6% to $34.6 billion. Although purchases of crude petroleum and natural gas increased, imports of coal fell 25.8% to 33 million tons. 

    And, despite the success so far in withstanding pressure from the U.S., the Chinese economy will keep taking punches from the trade war. “Tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” wrote Capital Economics in a note. “We therefore expect export growth to slow over the coming quarters, weighing on economic growth.” 

  • China Reconfigures Export Markets as Shipments to U.S. Plummet

    China Reconfigures Export Markets as Shipments to U.S. Plummet

    U.S. Market Collapsing For China

    As Americans and Chinese officials scrambled to forge new politically acceptable trade terms, China reported a pandemic-level decline in exports to the U.S. 

    Chinese shipments to the U.S. fell 34.4% year-on-year in May to $28.8 billion, the steepest drop since Covid-19 upended global trade in February 2020. Chinese imports from the U.S. fell 17.9% to $10.8 billion, suggesting that the world’s richest trading relationship is collapsing. 

    The question is how much the two countries can sustain trade despite escalating tensions. Last week, President Trump called his phone call with Chinese president Xi Jinping “very good” with a “very positive conclusion for both countries.” 

    Overall, Chinese exports increased 4.8% year-on-year to $316.1 billion, and imports dropped 3.4% to $212.9 billion. 

    China Reconfigures Exports Markets

    The global trading system is going through its biggest reconfiguration since China’s accession to the World Trade Organization in 2001 launched its historic export boom. 

    With the U.S. market drying up for them, manufacturers based in China are faced with a decision: Leave or sell somewhere else. 

    A lot of the reporting has focused on factories relocating to places like Vietnam or Mexico, but many firms are finding new markets. 

    In May, Chinese exports to 11 different trading partners increased at least 10% year-on-year: Germany, France, Vietnam, Thailand, Singapore, Indonesia, Australia, India, the UK, Canada, and South Africa. 

    The EU has many of the same protectionist politics as the U.S., but it’s still more open to China. Exports to France, up 24.2% to $4.6 billion, and Germany, up 21.7% to $10.5 billion, were especially striking. Overall sales to the EU rise 12.1% to $49.5 billion. Imports from the EU were flat at $22.9 billion. 

    There were other big jumps to appealing markets. Exports to Canada rose 20.4% to $4.7 billion. Exports to continental Africa rose 33.5% to $19.5 billion. Shipments to ASEAN nations, including Thailand, Malaysia and Thailand, rose 15.2% to $58.4 billion.  

    Shipments to Russia, whose economy has raced recent setbacks, dropped 10.7% to $8.1 billion. 

    Smartphone Exports Plummet Further

    The protectionist wave in the U.S. has hurt one consumer goods category more than others: smartphones. Chinese exports of smartphones declined 22.8% in value to $6.9 billion. They fell 9.9% in numbers to 55.3 million handsets. 

    The Chinese government has been delaying granting export licenses for shipping rare earths and other elements essential for making batteries, high-tech goods, and weapons. Rare earths shipments in May plunged 47.5% to $19 million. The paradox of rare earths is that companies need only incremental amounts, so it’s a tiny market by dollar terms. 

    Overall Chinese, high-tech exports increased 5.1% to $74.3 billion. The bigger increases have been in industrial production, notably cars and ships. Exports of motor vehicles rose 13.7% in May to $12 billion, and sales of ships increased 44% to $4.2 billion. 

    China Ratchets Up Soybean Purchases

    China, the world’s biggest buyer of soybeans, increased its purchases to a record high in May. Chinese negotiators know they have leverage with soybeans imports from the U.S., and Beijing’s been cutting off its buying. In the first four months of 2025, U.S. soybean exports to China dropped 51.3% to $2.4 billion. In May, however, China increased its purchases of soybeans 36.2% to 13.9 million tons, snapping up cargo from Brazil, according to news reports. By value, those imports rose 22.6% to $6.1 billion. Imports from Brazil, the world’s top soybean exporter, increased 9.6% to $11.3 billion. 

    Overall, imports of agricultural products rose 0.8% to $19.9 billion. China’s role in high-tech supply chains might be less geared toward the U.S. than it was at the start of the decade, but it’s not faltering. Imports of high-tech products rose 11.4% to $65.8 billion. Purchases of integrated circuits rose 8.9% to $33.7 billion. 

    However, there are signs that China’s domestic economy might still be facing challenges. In May, imports of crude petroleum, iron ore, and coal, all fell. 

    John W. Miller

  • Chinese Demand Falters as Imports Decline

    Chinese Demand Falters as Imports Decline

    Trade in a Time of Geopolitical Adjustment

    The focus of the global trade world is, rightly, on President-elect Donald Trump and the U.S. debating and deciding how far they’ll go in enacting new protectionist measures.

    But an issue that could upend geopolitics — with unintended consequences that will affect big issues like war and peace, migration, and supply chains — just as much is what appears to be a crumbling in Chinese domestic demand. 

    In a time of geopolitical shifting and adjustments, it’s one of the key factors to watch. In the first six months of 2024, according to TDM, China was the world’s second largest importer, shipping in $1.3 trillion worth of goods, behind only the U.S. at $1.6 trillion, and followed by Germany, the Netherlands, and the UK. (France, Japan, India, South Korea and Italy round out the top ten.)

    In November, total Chinese imports fell 3.9% to $214.9 billion from $223.6 billion a year ago.

    What Will Happen to Chinese Demand?

    Almost certainly knowing these numbers were coming, Beijing on Monday said it would unroll an “appropriately loose” monetary policy in 2025. That would be its first unwinding in almost 15 years. The goal will be to increase demand domestically and goose consumer consumption, according to government officials. Beijing also plans to give more subsidies, and even hand out consumer vouchers. China would embrace “the principle of pursuing progress while maintaining stability,” state news agency Xinhua said.

    The declines spanned the globe. Imports from the EU fell 6.5% to $21.7 billion. Imports from the U.S. dropped 11.3% to $12.4 billion. Imports from ASEAN countries declined 2.5% to $33.6 billion.

    In November, imports of agricultural products fell 15% year-on-year to $15.8 billion. Purchases of grain fell 35.7% to $4.3 billion. Imports of motor vehicles plummeted 28.9% to $3.3 billion. China’s preliminary monthly trade report doesn’t break out consumer goods in much detail, but some products offer hints of consumer confidence.  Imports of cosmetics and clean-care products, for example, dropped 8.3% to $1.2 billion.

    Et Tu, Electronics?

    One sector of global trade that had expected to survive the coming choppy waters is consumer electronics. There will surely be more curbs like those enacted by the U.S. on sales of chips, but in general the supply chains needed to produce iPhones and laptops is meant to endure. But here, too, there are signs of weakening. In November, Chinese imports of high-tech products rose only 2.6% to $64.7 billion. Imports of copper ore and concentrates, a key ingredient in making electronics, fell 8.1% to 2.2 million tons. 

    The Rest of the World

    China’s export picture was a little better in November, although there was still some softening, because of new tariffs and sluggish demand. Shipments of agricultural products rose 7.4% to $9.8 billion. Exports of high-tech products increased 6.5% to $81.8 billion. Exports of toys rose 4.9% to $3.1 billion. Some of these shipments were ordered over the summer as it became clear that Trump might win a second term to the White House. We’re likely to see a lot more of that in December and January, say analysts. 

    Total Chinese exports increased 6.7% year-on-year to $312.3 billion in November 2024 from $292.6 billion the year before. The forecast by analysts had been around 8.5%, and that was a drop from a 12.7% increase in October. Exports to the European Union rose 6.7% to $41.1 billion. Exports to ASEAN countries rose 14.7% to $53.7 billion. Exports to the U.S. rose 7.3% to $47.3 billion. Exports to Vietnam rose 12.3% to $14.5 billion.

    To be sure, factories in China have been affected by general sluggish in consumer confidence around the world. Sales of shoes dropped 1.9% to $3.8 billion. Exports of mobile phones slipped 0.3% to $16.9 billion. Even exports of motor vehicles, a staple of Chinese export success, dropped 7.7% to $9.1 billion. The U.S., EU, and Canada have all slapped duties on imports of Chinese electric vehicles. 

    John W. Miller

  • Steel Trade Trends in 2025

    Steel Trade Trends in 2025

    Shake-up in Global Steel

    The world of steel trade is in for a shake-up. New climate rules in Europe, the prospect of ramped-up U.S. tariffs on steel and an excess of Chinese steel imports mean companies around the world must calibrate their trade strategies in 2024.  

    With the U.S. locked in protectionism and the EU implementing climate rules, the action is shifting to countries like Turkey and Asian markets such as the Philippines, Thailand, Malaysia, Indonesia, Japan and South Korea.

    The Turkish Solution

    The world’s top importers of iron and steel (HS72), including scrap, during the first eight months of 2024 were Turkey (26.2 million tons), Italy (16.1 million tons), the U.S. (16 million tons), China (15.1 million tons), India (14 million tons), South Korea (11.9 million tons), Spain (9.7 million tons), Thailand (9.6 million tons), and Indonesia (8.7 million tons).

    Turkey’s top categories of iron and steel imports were scrap (13.5 million tons), semifinished products (4.2 million tons), flat-rolled (2.9 million tons), flat-rolled alloy (1 million tons), and pig iron (879,098 tons). Turkey’s best suppliers of iron and steel are the U.S. (3.1 million tons), Russia (3 million tons), China (2.3 million tons).

    Trump is Back

    The biggest news of 2024 is the re-election of so-called Tariff Man Donald Trump to the White House. Trump has promised to install 60% tariffs on all goods imported from China and 10% tariffs on goods imported from all over the world. Trump already imposed steel and aluminum duties during his first term that the Biden administration lifted in 2021. The moves increased costs for industries such as cars, machinery, appliances and infrastructure products made with imported steel.

    The U.S. imported $24.1 billion worth of iron and steel in the first nine months of 2024. Its top partners were Canada ($5.9 billion), Brazil ($3.7 billion), Mexico ($2.4 billion), South Korea ($1.4 billion) and Germany ($1.1 billion). By quantity, the U.S.’s top categories of iron and steel imports are flat-rolled clad, plated or coated (3.6 million tons), semifinished (2.8 million tons), and flat-rolled not clad, plated or coated (2.1 million tons).

    Europe’s Calling Card

    Don’t count out Europe.  In the first eight months of 2024, European iron and steel importers amounted to 34.7 million tons, up 3.3% from 2023. The top foreign markets were Russia (4 MT), India (3.5 MT), Turkey (3.3 MT), Ukraine (2.4 MT), and China (2.3 MT). That’s down from 52.3 million tons in 2017, the first year of the Trump presidency. Europe’s top iron and steel export markets were Turkey (8.8 million tons), the UK (2.5 million tons), the U.S. (2.4 million tons), Egypt (1.6. million tons), and Switzerland (1.5 million tons).

    China’s Oversupply

    China, of course, still reigns supreme atop the global steel industry. The country has been hit by a property bubble forcing excess steel capacity onto global markets. In November, the country announced a stimulus package over a trillion dollars, which should absorb more production.

    During the first eight months of 2024, the top exporters of iron and steel (HS72) in 2024 were China (64 million tons in the first eight months), the EU (34.7 million tons), Japan (24.4 million tons), South Korea (17.2 million tons), Indonesia (13.8 million tons), Brazil (9.9 million tons), Turkey (9.1 million tons), Iran (8.3 million tons), and India (8 million tons).

    The Flat-Rolled Market

    China is the world’s top exporters of flat-rolled iron or nonalloy steel products (HS7208), shipping out 21.9 million tons in the first eight months of 2024, ahead of Japan (9.9 million tons), South Korea (5.6 million tons), Turkey (2.1 million tons), India (2 million tons), and the U.S. (1.1 million tons).

    The biggest importers were South Korea (3.6 million tons), Turkey (2.9 million tons), India (2.7 million tons), the U.S. (1.9 million tons), Malaysia (1.7 million tons), Thailand (1.6 million tons), Mexico (1.5 million tons), Indonesia (1.4 million tons), and Japan (1.3 million tons). By comparison, in 2015, the U.S. imported 4.3 million tons of flat-rolled over the same time period.

    John W. Miller

  • China Finally Affected by Protectionist Tariffs

    China Finally Affected by Protectionist Tariffs

    September Rain

    China posted lackluster trade figures in September, highlighting how it might become slowly less reliant on global commerce as other major economies retrench.

    Chinese exports increased 2.4% year-on-year, below economists’ expectations of around 6%, to $303.7 billion, while imports increased only 0.3% to $222 billon.

    The 2024 Boom

    For most of 2024, Chinese exports and imports have been among the world’s best performing, despite aggressive protectionist tariff actions by U.S. and European governments. In August, for example, Chinese exports rose 8.7% year-on-year. Modern China, the greatest exporting power the world’s ever known, wasn’t going down so easily.

    That changed in September. “After the stellar run in 2024, China’s exports finally face a wake-up call from global trade protectionism and overcapacity, affecting sales quantity and unit value,” Gary Ng, a senior economist at French investment bank Natixis, told the South China Morning Post. “The weaker import data shows domestic demand has not recovered with cautious household and business sentiments regarding consumption and investment.” Chinese customs officials also pointed to typhoons in Asian ports, congestion in the shipping industry and the high trade volumes of previous years.

    EU Slump

    The bigger picture, however, is more complex. In particular, China’s September data point to a loosening of ties with the European Union. Shipments to the EU rose 1.9% to $42.1 billon while imports fell 3.2% to $23 billon. Imports from France fell 11.1% to $2.9 billion.  Shipments from Italy declined 7.8% to $2 billion.

    By comparison, exports to the U.S. rose 2.9% to $47 billion, while shipments from the U.S. rose 6.6% to $13.7 billion. Exports to ASEAN countries increased 7.2% to $46.4 billion. Imports rose 4.3% to $36.8 billion. Imports from Brazil fell 14.1% to $9.8 billion. 

    China continues to buy large quantities of industrial fuel and metals, although prices have been declining. It will always need raw materials to power its cities, cars and buildings. Imports of iron ore rose 3.2% to 104.1 million tons by quantity but fell 11.5% by value to $9.9 billion.  Imports of copper rose 8.7% by quantity to 2.4 million tons and 22.9% by value to $5.9 billion.

    Domestic Economy

    The domestic manufacturing economy is likely to supply more demand locally instead of shipping overseas. Exports of plastics products fell 4.9% to $8 billion. Exports of toys declined 6.1% to $4.1 billion. Shipments of mobile phones fell 4.9% to $15.1 billion. Shipments of footwear fell 12.8% $3.3 billion. Exports of furniture fell 9.7% to $4.7 billion. Shipments of high-tech products were basically flat, declining 0.7% to $80.6 billion.

    There are a few niche segments that bucked the trend and recorded strong increases in September. Exports of household appliances rose 5.2% to $8.6 billion, and sales of motor vehicles rose 25.7% to $11.6 billion. The rise of the Chinese auto industry, geared toward exporting electric vehicles, continues to be one of the driving forces in modern global trade. The U.S., the EU and Canada have all imposed import tariffs on Chine EVs in 2024. More protectionist action is expected around the world.

    Hi-Tech Supply Chain Intact

    China also needs to keep importing pieces and parts for its supply chains making smart phones and computers. Imports of high-tech products rose 10.5% to $69.7 billion.

    Inflation has been falling rapidly in China, pointing to the end of the Covid-19 pandemic and weakening consumer demand. One sector where prices fell the most was pharmaceutical. Imports rose 23.2% by quantity to 42,217 tons but dropped 1.6% to $4.1 billon by value. 

    The future of the Chinese economy is likely to look much different than it has in the first quarter of the 21st century. The government has announced programs to boost demand, including spending over $25 billion on construction. Officials say they are considering further moves.

    John W. Miller

  • It’s a Good Summer for Trade But China Ag Imports Fell In July

    It’s a Good Summer for Trade But China Ag Imports Fell In July


    During a summer that’s been a boon for free trade despite a looming escalation in trade wars, and the possibility of a second Trump administration, China’s agricultural imports dropped 4.9% year-on-year in July to $17.8 billion. 

    The trend reflects China’s regulatory practices, strategic protectionism, and shifting demographics. China has blocked some U.S. beef imports because of a prohibited feed additive, the sector is a favorite avenue of retaliatory actions, and the country’s population has recently started to contract. Purchases of meat fell 32.1% to $1.8 billion. Imports of fresh or dried fruit declined 20.4% to $1.1 billion. Imports of grain and soybeans both rose a few percentage points by quantity but fell around ten percentage points by value. Agricultural exports increased 1.9% to $8.3 billion.

    Overall China’s exports rose 7% year-on-year in July to $300.6 billion, while imports increased 7.2% to $215.9 billion. The strong trade figures surprised many observers. The U.S. and European economies have been surprisingly resilient in 2024, and inflation has been waning. Another factor: Purchasing managers are stocking up in anticipation of punitive trade actions. The EU last month imposed temporary tariffs of up to 37.6% on imports of electric vehicles from China. It’s expected to make them permanent this fall. The U.S. is preparing tariffs on a host of Chinese high-tech goods. Vincent Clerc, the CEO of shipping giant AP-Moeller-Maersk, told the Financial Times that their customers were “bringing orders forward” because “of the potential for a trade war, people would rather have Christmas goods already in the warehouse.”

    Demand in Western markets appears strong despite the risk of economic recession spotlighted by Monday’s stock market hiccup. Exports to the EU increased 8.4% to $45.8 billion, while shipments to the U.S. increased 8.2% to $45.8 billion. By comparison, exports to ASEAN countries increased 12.5% to $46.9 billion.

    However, there are signs that consumers around the world are feeling less prone to spending money in their pockets than they were during the heady days of Covid stimulus payments. Exports of furniture dropped 5% to $4.7 billion. Shipments of suitcases increased 5.2% by quantity to 311,145 Tons but fell 11.1% by value to $2.7 billion. Shipments of toys fell 3.6% to $3.7 billion. The same demographic crunch that could pose a risk to China’s appetite for agricultural products is likely in the long run to hurt China’s competitive advantage in manufacturing these low-tech products. Labor is likely to get squeezed, especially as the country capitalizes on its growing edge in high-tech goods, include solar panels and electric vehicles. 

    Despite the moves by U.S. and European policymakers to levy tariffs on Chinese imports, the country’s high-tech sector is still strong. Exports of motor vehicles increased 13.8% to $10 billion, while shipments of high-tech products rose 12.1% to $74.9 billion. Exports to Africa fell 7.1% to $13.5 billon, while imports from Africa increased 2.9% to $8.9 billion. 

    On the import side, the highlight was a boom in imports from the U.S., which increased 23.7% to $14.9 billion. The preliminary report doesn’t break out countries by specific product, but according to an analysis by Trade Data Monitor, in the 12 months between July of 2023 and June of 2024 included, the top Chinese imports from the U.S. included semiconductors, petroleum, copper, cars and fresh fruits and nuts. 

    Imports from the EU rose 7.5% to $24.9 billions, while purchases from ASEAN nations rose 11.4% to $33.3 billion. Imports of high-tech products rose 18.6% to $66.7 billion. 

    China’s appetite for industrial goods, an important bellwether for the global economy, appears solid. Imports of coal increased 17.5% to $4.5 billion. (It also rose by roughly the same amount by quantity.) China ramped up imports of iron ore and copper quantities by roughly 10% each. 

  • How Tariffs Are Reshuffling EV Trade

    How Tariffs Are Reshuffling EV Trade

    Age of the EV

    We’re entering the age of the electric vehicle, and global trade is keeping pace. Around 20% of all cars bought in the world in 2023, a total of almost 14 million, were electric, and there are now 40 million on the road, according to the International Energy Agency. Total trade in electric vehicles amounted to around $150 billion in 2023, up over 50% from 2022. The EV market is concentrated in the world’s top three economic poles: In 2023, 95% of EV sales were in China, the U.S., and the EU. These economies have the battery and automotive supply chains they need to maintain a robust EV manufacturing capacity.

    Germany v. China

    During this decade, Germany and China, now the world’s top two overall car exporters, have been running neck-and-neck in electric vehicle (EV) exports. In the first quarter of 2024, Germany exported $8.9 billion of EVs and China shipped out $8.1 billion, according to TDM data. South Korea, in third place, exported $3.4 billon, followed by Belgium ($3.2 billion), Japan ($1.7 billion), and the U.S. ($1.5 billion). 

    Americans Buy

    For all its purported troubles, the U.S. is still, in many ways that count, the world’s top consumer economy. The U.S., which shipped in $20.4 billion worth of EVs in 2023, is the world’s top importer of EVs, followed by Germany, the UK, Belgium and France. The U.S.’s top sources are Germany ($6.2 billion), South Korea ($4.4 billion), Mexico ($3.8 billion), Japan ($3 billion), Belgium ($1.5 billion), and Hungary ($600.9 million). China ($367.8 million) ranked seventh.

    The China EV Booms

    Like Japan in the 1980s and South Korea in the 1990s, China has dramatically expanded its automobile export capacity. Unlike those two economies, it’s benefitted from foreign investment and from a revolutionary new technology, electric vehicles. The auto industry is a massive part of the global economy, representing around 3% of total output. China has been the world’s top producer and market for cars since 2009. Thanks to massive investment and solicitation of foreign auto producers, China has been a net auto exporter since 2021. EVs now represent 44% of total Chinese auto exports, up from less than 1% in 2018.

    Here Come Tariffs

    Fearful of getting crushed by Chinese EV imports, the U.S. and EU have been throwing up protectionist walls against Chinese EVs. In May, the U.S. announced 100% tariffs, up from 25%, on imports of Chinese EVs.

    In early July, the European Union imposed provisional tariffs of up to 37.6%, in addition to the EU’s standard 10% duty on auto imports, on Chinese EVs entering the 27-nation bloc. Chinese EV companies have advanced technology and produce their vehicles roughly 30% more cheaply. The EU duties are set to last at least four months. Chinese trade officials have said they will retaliate by slapping tariffs on U.S. and European goods.

    Around half of Chinese car exports are made by Western companies like Tesla, Volkswagen, and Volvo, now China-owned, or in cooperation with Chinese firms. Tesla has said its Shanghai factory is it top export hub. In 2023, China was the world’s second largest exporter of automobiles, up from sixth in 2018.

    How China Fights Back

    Five of China’s top ten destinations for EVs in 2023 were EU members: Belgium, Spain, Germany, the Netherlands, and Slovenia. The other six countries in the top ten markets were the UK, Thailand, Australia, Canada, and Israel. The U.S. was China’s 22nd biggest market.

    How will it cope with tariffs? China’s real weapon is that it has diversified its auto export base. In 2023, it exported over a billion dollars’ worth of cars, trucks and part to 38 different countries. The Chinese automobile industry’s top customer: Russia. In 2023, it imported $22.5 billion worth of autos and auto parts, up from $6.3 billion in 2022, leapfrogging from fourth to first. However, only a small percentage, around a quarter-billion dollars’ worth, was EVs.

    Chinese exports of EVs to Brazil skyrocketed to $1.1 billion from around $20 million in the first five months of 2024. This year, Brazil has been China’s third biggest market for EVs, up from 22nd in 2022. The U.S. so far in 2024 has been China’s 29th biggest market, with only $57.4 million in exports.

    John W. Miller is TDM’s Chief Economic Analyst. For more information visit tradedatamonitor.com

  • China Reboots Trade Thanks to Africa, India, Latin America

    China Reboots Trade Thanks to Africa, India, Latin America

    Don’t let anybody tell you that globalization is dying—at least, not yet.

    Global trade economists obsess over consumer demand and rising protectionism in the U.S. and Europe, but this week’s release of Chinese trade statistics shows that other markets might soon be catching up in relevance.

    The Promise of Other Markets

    China’s exports to Latin America, Africa and India all rose by double-digits in the first two months of 2024. China releases its January and February trade data together every year to make up for the dip corresponding with Chinese New Year, which can fall in either month. The unique two-month batch of trade data is one of the spring’s most hotly-anticipated economic releases.

    Overall, China’s exports increased 7.1% year-on-year in January and February to $528 billion, and the country’s imports rose 3.5% to $402.9 billion. The relatively strong performance surpassed analysts’ expectations thanks to a recovery in global consumer demand, an expansion in high-tech investment and artificial intelligence, and a low baseline because of Covid shutdowns in 2022 and 2023. It also matched with encouraging economic data from other regions of the world, including South Korea, Germany, and Taiwan. 

    A Slump in Europe

    Exports to the U.S., China’s largest single trade partner, increased 5% to $73.4 billion, and exports to ASEAN countries rose 6% to $82.7 billion. The negative outlier among the top trading partners was the European Union. Exports to the EU fell 1.3% to $78.3 billion.

    The biggest surprise was how much China exported to countries that rank in the middle or at the bottom of the world’s economic league table. Exports to Latin America rose 20.6% (and were up 33.8% to Brazil) to $40.9 billion, shipments to India rose 12.8% to $19.5 billion, and sales to Africa rose 21% to $28.8 billion.

    “As our export commodities are climbing up the value chain, coupled with China’s proactive opening up and the expansion of import market opportunities, China has great potential both in import and export,” said minister of commerce Wang Wentao at a press conference this week. Wang pointed out that China’s export reboot has become increasingly reliant on what he called the “big three”: Electric vehicles, lithium-ion batteries, and solar panels.

    Classic Manufacturing Rebounds

    Thanks to demand driven in part by consumer in Latin America, Africa and India, China’s traditional manufacturing consumer staples are enjoying a resurgence. Exports of footwear, for example, rose 14.4% to $8.7 billion. Exports of toys increased 15.9% to $5.7 billion. And its heavy industrial sector continued to hum. Sales motor vehicles rose 12.6% to $15.7 billion, and exports of ships rose 173.1% to $6.8 billion. Exports of mobile phones increased 12.8% to 123.7. million by quantity, and dropped 18.2% to $19.3 billion by value. Exports of rare earths rose 18.7% by quantity to 8,773.9 tons. By value, they shrank 44% to 81.8$ billion, demonstrating by their price decline that they are perhaps not as rare as some would have you believe. 

    Asian Exporters March On

    On the import side, the U.S. and Europe continued to lose out to Asian partners. Imports from the EU fell 9.4% to $39 billion, and from the U.S. dropped 9.7% to $26.1 billion. Imports from ASEAN countries increased 3.3% to $57 billion, and from Latin America increased 8.1% to $41.7 billion. Imports from India increased a whopping 34.7%, but from a lower baseline of $3.7 billion. Imports fell across a wide variety of categories and were saved only by big purchases of mechanical and electrical products, up 7.7% to $137.2 billion; iron ore, up 22.8% to $27.5 billion; and crude oil, up 2.8% to $51.3 billion.

    The export resurgence has further boosted China’s trade surplus with the rest of the world. It was $125.1 billion in the first two months, up from $116.9 billion over the same period in 2023, and a new record.

  • Vietnam’s Secret Weapon: Agriculture

    Vietnam’s Secret Weapon: Agriculture

    In a tricky global economy, Vietnamese exports shrank in 2023, but the rising economic power managed to be one of the only countries to increase merchandise exports to China, thanks to a surprising surge in exports of fruits and vegetables, as well as rice, demonstrating the importance of export diversification.

    The Difficulties of 2023

    The country of 97.5 million encountered headwinds in 2023. Its gross domestic product rose only 5.1%, below recent trends. In 2022, it had been 8%. Some foreign investors pulled back amid crackdowns on corruption. Vietnam’s imports fell 9.2% to $326.4 billion, an indication of general economic sluggishness.

    The Vietnamese export machine, key to the country’s prosperity, closed the year strong. In December, the country’s exports increased 8.1% year-on-year in December to $31.5 billion. However the jump couldn’t save Vietnam’s year. Total exports in 2023 fell 4.6% to $354.7 billion. Exports generated by foreign companies fell 6% in 2023 to $257.2 billion. Vietnam was hurt by the same confluence of forces that damaged trade elsewhere: inflation, weak consumer demand, and regression after a post-Covid boom.

    Exporting to Prosperity

    The key to Vietnam’s economic growth is its export sector, which is heavily reliant on shipments to two markets, China and the U.S., the world’s top two economies and superpowers keen to forge alliances with Vietnam. Ever since China joined the World Trade Organization in 2001, the U.S. and European Union have salivated about prying open the country’s billion-consumer market. Vietnam is still only the 11th biggest supplier of Chinese imports, but unlike Europe and the U.S., its shipments to China have been rising. In 2023, Vietnamese exports to China increased 5.6% to $61.2 billion, while U.S. exports to China fell 4% and European Union exports rose only 0.4%.

     The Diversification Trick

    Vietnam’s trade with the bigger power isn’t concentrated in a few sectors. Exports to China of fruits and vegetables, for example, leapt 138.7% to $3.6 billion in 2023. Exports of computers, electrical products and parts rose 9.8% to $13 billion. And sales of mobile phones ticked up 3.7% to $16.9 billion. To be sure, Vietnamese exports to China of cement, coal, crude oil and wood all fell, but the country isn’t exclusively reliant on a few commodities.

    By comparison, in 2023 Vietnamese exports to the U.S. declined 11.3% to $97 billion. Exports of textiles and garments dropped 16.7% to $14.5 billion. Shipments of mobile phones and parts fell 33.5% to $7.9 billion. And sales of machines, equipment and tools fell 9.8% to $18.2 billion. And there was no surge in agricultural exports to make up for the shortfalls. Sales of fruits and vegetables rose 4% to a meager $257.7 million. Exports to the U.S. of Vietnam’s thriving fisheries sectors dropped 26.9% to $1.6 billion.

    The Battle for Vietnam

    As Vietnam’s economy has matured, it has developed into a strategic economic ally for every economic power in the world. Chinese manufacturers see a ripe consumer market. U.S. industry sees a less fraught low-cost labor market. And everybody else sees a young, dynamic country climbing the rankings of the world’s economies. It’s no surprise that both U.S. president Joe Biden and Chinese leader Xi Jinping visited Vietnam during the second half of the year. It was the only country that both leaders visited in 2023. Everybody wants a piece of Vietnam.

    But trade with Vietnam did not fare as well in 2023 as countries had hoped. Exports to the European Union fell 7% to $44 billion, while imports from the EU dropped 4.1% to $15.3 billion. Exports to ASEAN countries dropped 4.5% to $32.6 billion. Imports from ASEAN countries declined 13.5% to $40.9 billion. Exports to the United States dropped 11.3% to $97 billion. Imports from the U.S. fell 4.5% to $13.8 billion. Exports to China rose 5.6% to $61.2 billion. Imports from China fell 6.6% to $110.6 billon. So the only categories to grow in the major trading relationships was exports to China.

    Silver Linings

    There were a few other bright spots. Exports to India rose 6.8% to $8.5 billion. Total exports of fruits and vegetables increased 66.7% to $5.6 billion, and total rice exports rose 35.3% to $4.7 billion. However, exports of footwear dropped 15.3% to $20.2 billion, and exports of textiles and garments fell 11.4% to $33.3 billion. The government has set a GDP growth target of 6% to 6.5% in 2023. With those traditional sectors dropping off, Vietnam will have to keep diversifying if it wants to meet its target.

  • What’s Behind the High-Tech Trade Slump?

    What’s Behind the High-Tech Trade Slump?

    It’s not been an easy time for international trade, as a recent report co-authored by Trade Data Monitor and the World Intellectual Property Organization found.

    High-tech exports are set to decline by 4 percent in 2023, according to the TDM/WIPO analysis. Global and high-tech trade have soared and sunk like rollercoasters since 2019. After the strong post-pandemic recovery in 2021 followed by a slowdown in 2022, total merchandise trade is expected to grow at a meagre 0.8 percent in 2023.

    Changing global value chains and geopolitical tensions are driving some of the trade slowdown, as well as inflation which is increasing the costs of traded high-tech goods. The development of new sectors, particularly in the manufacturing of renewable energies, batteries and electric vehicles, helps mitigate the high-tech growth slump, however.

    The key player, as a consumer and manufacturer, is still China, and Chinese high-tech exports fell 11.4% to USD 728.2 billion in the first 10 months of 2023. The country’s smartphone exports fell by close to 7% to USD 106.8 billion, and sales of its data processing machines dropped 24% to USD 82.8 billion (see Figure 3). Shipments to many of China’s traditional trading partners dropped. Exports to the U.S. fell by 21% to USD 102.7 billion; to the Republic of Korea by 13.4% to USD 33.9 billion, and to the Netherlands by close to 20% to USD 33 billion. Still, despite the decline, China is the leading high-tech exporter by far.

    Other Asian economies also experienced high-tech export declines. Exports of the Republic of Korea, for example, declined by 28% to USD 110 billion. Japanese exports fell 10% to USD 76.9 billion. Viet Nam’s export fared better, falling 1.7% to USD 115 billion in the first nine months of 2023.

    By contrast, U.S. high-tech exports rose 4.4% to USD 282.5 billion. Shipments to Germany, the Netherlands and Belgium all rose by double digits. U.S. exports of smartphones, routers, board and panels, parts for gas turbines, and computers all increased.

    Germany’s high-tech exports rose 6.6% to USD 217.4 billion over the first ten months of 2023. Exports of big airplanes rose 26.8% to USD 19.7 billion, shipments of immunological products rose 9.4% to USD 24.5 billion, and sales of processors and controllers, electric integrated circuits jumped 23.5% to USD 9.6 billion. And France’s high-tech exports increased 2.7% to USD 97.7 billion, thanks to increases in shipments of airplanes (up 16.9% to USD 19.7 billion), electronic integrated circuits (up 16.9% to USD 5.6 billion), and spacecraft, including satellites (up 438.4% to USD 2.1 billion). 

    Other fast-growing high-tech exporters in Europe include Austria, Hungary and Poland. Austria’s high-tech exports rose 16.9% to USD 22.1. billion in the first 10 months of 2023, thanks to hikes in shipments of anti-serum, up 26.7% to USD 3.8 billion, electrical panels, up 17.3% to USD 983 million, and transistors, up 40.8% to USD 650.1 million.

    Hungary’s high-tech exports increased 10.8% to USD 20 billion, on the back of sales of processors, up 11.2% to USD 2.3 billion, routers, up 27% to USD 1.7 billion, and smartphones, up 99.7% to USD 1.1 billion. Polish high-tech shipments increased 7% to USD 29.5 billion thanks to sales of data processing machines, airplane parts and hearing aids.

    John W. Miller

  • China Hikes Iron Ore, Copper Imports Amid Car Building Boom

    China Hikes Iron Ore, Copper Imports Amid Car Building Boom

    In the somewhat gloomy December and annual China trade statistics released in the second week of January was buried a piece of data that hearkened back to the boom years of Chinese commodity consumption: China is buying a lot more iron ore and copper.

    In December, China boosted iron ore imports 11.1% year-on-year to 100.9 million tons, worth $12.4 billion. Copper imports rose 18.2% to 2.5 million tons, worth $5.3 billon. These confirmed ongoing trends. For all of 2023, iron ore imports rose 6.6% to 1.2 billion tons, worth $134 billion. For the year, copper purchases rose 9.1% to 27.5 million tons, worth $60.1 billion.

    But the reasons for the big increase is no longer buildings and highways of a society punching its way into to global prosperity as it was in the early 2000s. Instead, these rising industrial commodity purchases are underpinned by China’s booming automobile and shipbuilding industries. Car exports rose 52% year-on-year in December to $8.9 billion. China, in fact, is set to pass Japan this year as the world’s number one auto exporter. Exports of ships, a related industry, increased 28.6% to $3.2 billion. 

    The headline numbers were less bullish, but perhaps not as bad as many feared, for China and the global economy. Total exports rose only 2.3% in December to $303.6 billion from $296.9 billion a year ago. For the year, exports dropped 4.6% to $3.4 trillion, a decline Chinese officials attributed to a faltering global economy. “The global economic recovery has been weak in the past year,” Lyu Daliang, a government spokesperson. “Sluggish external demand has hit China’s exports. Exports to the U.S. dropped 4.8% to $42.2 billion. Exports to ASEAN countries improved 0.4% to $50.2 billion. Exports to the EU dropped 1% to $42.8 billon. 

    Among the bright spots in partner countries, Chinese exports to India increased 8.5% to $10.5 billion, shipment to Russia increased 22.5% to $10.7 billion, and sales to Africa increased 9.5% to $15.3 billion. 

    There was a recovery in high-tech trade, driven by more demand for semiconductors and digital equipment. The work from home economy driven by the Covid-19 pandemic has subsided some, but it’s caused enough structural changes to undergird a new tech economy. For December, shipments of high-tech products increased 0.5% year-on-year to $77 billion, suggesting that the sector might be turning a corner after a dismal year. For all of 2023, high-tech exports dropped 10.8% year-on-year to $842.5 billion.

    Industrial commodities dented exports more than high-tech trade. China shrank exports of petroleum products 39.8% to 4.7 million tons. By value, they decreased 42.7% to $3.7 billion. Exports of fertilizers fell 26.8% to $707 million. Exports of steel products rose 45.4% to 7.7 million tons but they were sold at a discount. By value, they declined 8.7% to $6.4 million.

    The increases in copper and iron ore purchases were among outliers in Chinese imports. Total imports increased 0.2% to $228.3 billion from $227.9 billion. For the year, imports declined 5.5% to $2.6 trillion. China increased imports from the EU 0.4% to $24 billon. Imports from the U.S. dropped 4.3% to $14.9 billon. Imports from ASEAN countries fell 2.4% to $35.7 billion. There were a few bright spots among trading partners. Imports from India rose 24.1% to $1.5 billion. Imports from Russia increased 23.1% to $11.2 billion. Imports from Africa rose 4.3% to $8.8 billion. 

    And China’s appetite for coal, driven largely by demand from new power plants generating power for cities and a new generation of electric vehicles, showed no signs of abating. China increased coal imports 53% to 47.3 million tons, and by value 22.8% to $5.2 billion. For the year, China hiked purchases of the black rock 61.8% to 474.4 million tons, worth $53 billions.

    John W. Miller

  • Trade Data Monitor’s Top 10 Trade Trends Going Into 2024

    Trade Data Monitor’s Top 10 Trade Trends Going Into 2024

    It’s not an easy time for global trade–the roughly $25 trillion piece of the $105 trillion world economy. Protectionism is roaring in the U.S. and Europe, causing geopolitical tension with China. Inflation across most of the world has shrunk consumers’ wallets and imports, while deflation in China is also scaring businesses. Asian supply chains are slumping. After Russia’s invasion of Ukraine in 2022, the late 2023 conflict in Israel-Palestine has created more business uncertainty, danger for container ships transiting the Red Sea, and geopolitical tension. And then there’s the structural shifts in supply chains that have raised fears of deglobalization. That is probably less of a risk that people think. “We do see some signs in the data of trade fragmentation linked to geopolitical tensions,” said WTO chief economist Ralph Ossa. “Fortunately, broader deglobalization is not here yet. The data suggest that goods continue to be produced through complex supply chains, but that the extent of these chains may have plateaued, at least in the short run.” In other words, this is a time of change, more reason than ever to pay close attention to trends.

    Here are Trade Data Monitor’s top 10 ongoing trade trends at the start of 2024:

    1. Trade Crisis: Protectionism, price swings (inflation in the U.S. and Europe, deflation in China) and geopolitical tensions have created an uncertain environment for trade. The World Trade Organization now forecasts global trade to grow by only 0.8% in 2023, less than half the 1.7% increase predicted in April. For 2024, the WTO expects an increase of 3.3%, a modest recovery, but below the trend in the early 2000s.
    2. The COVID Effect: The COVID-19 pandemic depressed trade in 2020-2023, but now it’s triggered a booming in shipments of vaccines and medical test kits. The U.S. increased imports of medical test kits 46% to $44.7 billion in the 10 months of 2023. The top exporters of medical test kids are Switzerland (up 12% to $39.3 billion), Germany (up 9% to $24.5 billion), and the U.S. (up 11% to $16 billion), followed by Ireland, Belgium and the Netherlands.
    3. China Problem: It used to be that you could count on death, taxes and an uptick in Chinese exports. That’s no longer the case. Manufacturers have diversified their supply chains, consumers aren’t buying enough, and tariffs and export restrictions are rising. The upshot: In the first 11 months of 2023, Chinese exports declined 4% to $3.1 trillion. Exports to the U.S. over that time fell 13% to $463.7 billion.
    4. Asia’s Slump: China wasn’t the only Asian country to suffer declining exports. Singapore’s shipments fell 9.3% to $395.5 billion, South Korean exports declined 10% to $519.3 billion, and Japan’s sales fell 4.6% to $591.4 billion, and Taiwan’s exports fell 12.6% to $354.2 billion in the first 10 months of 2023.
    5. U.S. and European Rebound: The situation has been better for the U.S. and Europe. Supply chains are adjusting away from China, benefitting U.S. and European trade. Germany’s exports rose 1.5% to $1.4 trillion and French shipments increased 5.3% to $527.9 billion in the first 10 months of 2023. U.S exports declined 2.4% overall to $1.7 trillion, but that was mainly because of a decline in fuel prices. Shipments of electronics, machinery, cars, airplanes and pharmaceuticals all increased.
    6. Don’t Take Your Eye Off Electric Cars: Electric cars might be the most significant trade product in the world right now. Germany (up 86% in the first nine months of 2023 to $30.4 billion), China (up 112% to $25.1 billion), Belgium (up 78.1% to $13.3 billion), South Korea (up 89% to $10.4 billion) and the U.S. (up 41.4% to $5.8 billion) are leading the charge.
    7. The Energy Revolution: Investments in green energy, driven by governments and consumer demand, are propelling new trade flows. For example, U.S. imports of solar panels and related parts increased 70.1% to $19.5 billion in the first 10 months of 2023.
    8. Russia-China Trade: The huge boom in Russia-China trade, triggered by the war in Ukraine and subsequent U.S. and European sanctions, is still going on but it is finally showing signs of tapering off. Russia is now China’s sixth biggest source of imports and sixth biggest export destination. But after triple-digit increases in 2022, monthly increases are finally dropping. For example, in November 2023, Chinese exports to Russia increased 35% to $10.3 billion.  
    9. Regional Trade Boom: We’re seeing a healthy boom in regional trade networks. One example is the Middle East. For example, Iranian exports to Iraq (+73%) and Turkey (+32%) increased but the country’s shipments to China fell 16.3% in the first nine month of 2023. And the increases weren’t only driven by higher oil prices. Iran increased its oil exports to Iraq 332.8% to 88.4 million barrels in the first nine months of 2023.
    10. China is Buying All the Coal: While much of the rest of the world is trying to wean itself from fossil fuels, especially the dirtiest one, coal, China is ramping up imports. Ironically, it needs coal partly to power a new generation of power plants pumping out electricity for electric car batteries. In the first 10 months of 2023, it hiked purchases of the black rock 38% to $33.5 billion by value, and 96.6% by quantity to 250.3 million tons.

    John W. Miller is Trade Data Monitor’s Chief Economic Analyst, in charge of writing TDM Insights, a newsletter analyzing key issues through trade statistics. John is an award-winning journalist who’s reported from 45 countries for the Wall Street Journal, Time Magazine, and NPR.

  • TDM Data Used to Scrutinize Impact of Steel and Aluminum Tariffs

    TDM Data Used to Scrutinize Impact of Steel and Aluminum Tariffs

    Trade scholars in a recent paper used Trade Data Monitor data on steel and aluminum trade to gauge the impact of 2018-2019 protectionist measures on U.S. and European Union imports.

    The paper by Simon Evenett and Fernando Martin, published by the Center for European Policy Research, found that because the U.S. and European Union import relatively small quantities of Chinese metals, “limited EU and US leverage is unlikely to change investment plans of Chinese steel producers.” If the U.S. and EU raise tariffs, Chinese exports will be redirected to “third markets – and this may not be without cost to Chinese firms that may have to accept lower export prices.”

    For example, China accounted for only 11% of U.S. aluminum imports and 2% of steel imports in 2022, according to TDM data.

    The U.S. and EU have been negotiating a new agreement on steel and aluminum trade known as the Global Arrangement on Sustainable Steel and Aluminum, to “address carbon emissions on steel and aluminum” while restoring “market-oriented conditions.”

    The paper found that “while EU and US purchases of steel and aluminum account for half of world imports, so diversified are China’s exports that transatlantic leverage over Chinese producers is likely to disappoint. Further trade deflection, not accelerated Chinese decarbonisation, is the likely outcome of any climate-related sectoral trade deal.”

  • China Boosts Imports of Raw Materials by Double Digits

    China Boosts Imports of Raw Materials by Double Digits

    China in October dramatically increased imports of fossil fuels, industrial metals and agricultural commodities, a run on raw materials that if sustained will have a major impact on prices and supply chains.

    China continued to increase its ferocious energy consumption, hiking imports of natural gas 120.1% year-on-year to 8.8 million tons, coal 23.3% to 36 million tons, and crude oil 13.6% to 49 million tons.

    It also increased imports of industrial metals used in construction, automotive, high-tech, and defense, buying 23.8% more copper, up to 2.3 million tons, and 4.9% more iron ore, up to 99.4 million tons. One possible reason for the increased demand for commodities is a rebound in the real estate market. The Chinese central bank has simplified lending rules, given first-time home buyers lower interest rates, and will issue hundreds of billions of dollars’ worth of bonds for infrastructure. 

    In agriculture markets, China reduced shipments of meat, but increased imports of fruits and nuts 26.4%, grain 38.4%, soybeans 25.2% and vegetable oil 27.2%.

    Buying from Africa and Latin America

    Given this hungry appetite for commodities, it’s no wonder that China is increasing trade with resource-rich countries of Africa and Latin America. Imports into China from Latin America jumped 28% to $20.7 billion. Imports from Brazil increased 40.4% to $10.6 billion. Imports from Africa jumped 22.9% to $10 billion, and imports from South Africa rose 23% to $2.9 billion.

    Overall, Chinese imports rose 3% year-on-year to $218.3 billion, while exports declined 6.6% to $274.8 billion. The resulting trade surplus, $56.5 billion, dropped over 30% from $77.7 billion in September.

    Volatility of Global Trade

    Global trade is in the most volatile period it’s been in since the end of the Cold War. There are wars ongoing in Ukraine and the Middle East, a green energy and electric car revolution, rising protectionism and tension between China and its top trading partners, the U.S. and Europe.

    It remains to be seen whether China will continue to aggressively expand its trade with the Global South. By comparison, imports from the EU rose 6.8% to $22.7 billon. Imports from the U.S. fell 2.3% to $12.3 billion. Imports from ASEAN countries rose 10% to $36.7 billion. Imports from Japan fell 7.8% to $13.5 billion. Even the China-Russia trade boom seems to be finally leveling off: Purchases from Russia rose only 7.2% to $11.1 billion.

    The Problem of China’s Export Slump

    The rising imports contrasted with a continued drop in exports. The slump is cutting across almost all commodities. Exports of high-tech products fell 8% to $74.8 billion. Exports of luggage, footwear, toys and textiles all dropped.

    Underlying those declines is the persistence of weakening economies in rich countries. Exports to the EU fell 12.2% to $38.6 billion. Exports to the U.S. dropped 7.6% to $43.2 billion. Exports to ASEAN countries decreased 12.6% to $41.5 billion. Exports to Japan fell 12.8% to $12.9 billion. 

    There were exceptions in some markets, including, as has always been the case recently, in automotive. But it wasn’t just cars. Exports of ships rose 34.3% to $2.8 billion, and sales of mobile phones rebounded, rising 21.8% to $18.7 billion.

    Solutions to Trade Wars

    One of the causes of lower exports is that foreign direct investment into China by foreign companies has been dropping. Beijing has said that FDI declined almost $12 billion year-on-year in the quarter between July and September.

    Chinese prime minister Li Qiang promised this weekend to make China a more attractive place for foreign companies to invest, an “continue to create a market-oriented, legal, and international business environment.”

    And China is also working to reduce protectionism. Its trade officials have been in talks with Australia to resume trading after a breakdown in trade ties over a series of disputes, amplified by Australia’s inquiries into the origins of Covid-19.