China imports hammered by trade war fears, as market selloff continues
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The markets continue to be buffeted by fears of a global trade war, as Donald Trump vacillates over the imposition of tariffs on major US trading partners.
Last night in New York, the S&P 500 index fell 1.8% to its lowest level since early November – the post-election Trump bump has well-and-truly vanished. Tech stock slid, pushing the Nasdaq index into a correction (more than 10% below its record high).
Wall Street's fear index, the CBOE Volatility index, closed at its highest level since 18 December, showing investors are jittery.
They may also be flummoxed, after Trump temporarily delayed tariffs on many goods from Canada and Mexico yesterday. Trump delays tariffs on many products from Mexico and Canada
Despite that u-turn, 'the great unwind of US equity evolves and gathers momentum', says Chris Weston, analyst at brokerage Pepperstone.
Weston explains:
Confusion reigns around the Trump Administration policy agenda, and while we've seen yet another pause on Canadian and Mexican tariffs until 2 April, the lack of consistency to hold policy firm further limits the visibility US businesses have to position margins and to make strategic planning decisions.
Trump detailed that he's 'not even looking at the stock market' … it's easy to be sceptical on that call, but Trump needs to portray control when putting through the hard policies.
It's never a great sign when politicians start blaming malignant forces when the financial markets give their policies the thumbs down. But that was Trump's message yesterday; asked if his tariffs were scaring the markets, Trump replied:
'Well, a lot of them are globalist countries and companies that won't be doing as well.
Because we're taking back things that have been taken from us many years ago.'
European stock markets are expected to drop today, with the FTSE 100 index forecast to fall 0.55% or 48 points. Japan's Nikkei has fallen over 2% today, to its lowest level since last September.
Investors are poised for the latest US jobs report. The consensus is that hiring picked up in February, lifting non-farm payrolls by around 160,000 last month.
But yesterday, Larry Kudlow – former Director of the US National Economic Council turned Fox News host – suggested the NFP report could be flat, or even negative….
Kudlow: "Some very smart people are telling me that the February jobs number coming out Friday could be flat, even negative. The GDP tracker from the Atlanta Fed is showing for the first quarter a -2.5 or -2.8%. And we've had lousy numbers on things like housing and business… pic.twitter.com/zKFN5h6wJv — Jeffrey Jonah (@JeffreyJonah5) March 6, 2025 The agenda 7am GMT: Halifax index of UK house prices in February
10am GMT: Eurozone GDP Q4 2024 (3rd estimate)
1.30pm GMT: US non-farm payroll for February Share Show key events only Please turn on JavaScript to use this feature
China imports have fallen sharply at the start of this year, as the prospect of a trade war with the US hits its economy.
Imports fell 8.4% year-on-year in January and February, new customs data shows, weaker than the 1% growth expected by economists.
That suggests that China's manufacturing base could be cutting back on buying raw materials and parts, concerned that demand for their wares would fall due to new tariffs at the US border.
Lynn Song, chief economist for Greater China at ING, says:
China's economy got off to a weak start in 2025 as exports grew just 2.3% in the first two months of the year. A sharp slump in imports, meanwhile, resulted in a bigger-than-expected trade surplus.
Looking into the detail of the import data, Song explains:
We still saw strong imports in tech-related imports, with a 54.4% YoY ytd surge in automatic data processing equipment imports. And an overall 6.4% YoY ytd growth in hi-tech product imports. However, most other categories came in weak.
Commodities imports generally contracted over the first two months of the year, with crude oil (-10.5%), natural gas (-13.8%), and steel (-7.9%) all still soft. We're already seeing a slump in soybean imports, which fell by -14.8% YoY ytd. This was even before the impacts of China's retaliatory tariffs on US agricultural products.
China's exports rose, though, in the first two months of 2025 – up 2.3%.
Exports to the US rose to almost $76bn, Bloomberg reports, the highest total for January and February since 2022 when the Covid-19 pandemic was upending global trade.
US data yesterday showed that America's trade deficit swelled to a record high in January, as firms tried to front-run tariffs by importing more goods. Share
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The markets continue to be buffeted by fears of a global trade war, as Donald Trump vacillates over the imposition of tariffs on major US trading partners.
Last night in New York, the S&P 500 index fell 1.8% to its lowest level since early November – the post-election Trump bump has well-and-truly vanished. Tech stock slid, pushing the Nasdaq index into a correction (more than 10% below its record high).
Wall Street's fear index, the CBOE Volatility index, closed at its highest level since 18 December, showing investors are jittery.
They may also be flummoxed, after Trump temporarily delayed tariffs on many goods from Canada and Mexico yesterday. Trump delays tariffs on many products from Mexico and Canada
Despite that u-turn, 'the great unwind of US equity evolves and gathers momentum', says Chris Weston, analyst at brokerage Pepperstone.
Weston explains:
Confusion reigns around the Trump Administration policy agenda, and while we've seen yet another pause on Canadian and Mexican tariffs until 2 April, the lack of consistency to hold policy firm further limits the visibility US businesses have to position margins and to make strategic planning decisions.
Trump detailed that he's 'not even looking at the stock market' … it's easy to be sceptical on that call, but Trump needs to portray control when putting through the hard policies.
It's never a great sign when politicians start blaming malignant forces when the financial markets give their policies the thumbs down. But that was Trump's message yesterday; asked if his tariffs were scaring the markets, Trump replied:
'Well, a lot of them are globalist countries and companies that won't be doing as well.
Because we're taking back things that have been taken from us many years ago.'
European stock markets are expected to drop today, with the FTSE 100 index forecast to fall 0.55% or 48 points. Japan's Nikkei has fallen over 2% today, to its lowest level since last September.
Investors are poised for the latest US jobs report. The consensus is that hiring picked up in February, lifting non-farm payrolls by around 160,000 last month.
But yesterday, Larry Kudlow – former Director of the US National Economic Council turned Fox News host – suggested the NFP report could be flat, or even negative….
Kudlow: "Some very smart people are telling me that the February jobs number coming out Friday could be flat, even negative. The GDP tracker from the Atlanta Fed is showing for the first quarter a -2.5 or -2.8%. And we've had lousy numbers on things like housing and business… pic.twitter.com/zKFN5h6wJv — Jeffrey Jonah (@JeffreyJonah5) March 6, 2025 The agenda 7am GMT: Halifax index of UK house prices in February
10am GMT: Eurozone GDP Q4 2024 (3rd estimate)
1.30pm GMT: US non-farm payroll for February Share
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