Iris Pang, Economist at ING, explains that the impact of US tariffs was not obvious last month on China as some Chinese exporters were able to front-run deliveries in the first five days, so the impact wasn’t felt over the entire month.
Key Quotes
“In addition, this is the low season for exports; peak months are usually from September to November. So although we saw monthly declines in various items, we can’t attribute this to the US move, particularly because not all of the items were even on the tariff list. As such, we think the export data has yet to reflect the full impact of the latest trade action.”
“Still, from another angle, we do see some impact. China’s exports to the US fell 2.5% month-on-month and grew 19.0% year-on-year, and imports from the US fell 1.5% MoM with 16.0% YoY growth. This could still be a result of the low season, as China’s exports to Europe also showed a monthly contraction of 2.3%.”
“On the other hand, China’s imports from Europe increased substantially by 51.7% MoM.”
“The only thing we can conclude is that the tariff impact in July was not obvious but subtle monthly changes show that tariffs are changing the behaviour of some exporters and importers, and we expect this to become more visible in the coming months.”
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