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EU goods trade gaps with US and China widen

EU goods trade gaps with US and China widen

The European Union’s trade surplus in goods with the US and its deficit with China both increased in the first five months of 2019, figures that could add extra strain to global tensions.

The European Union’s surplus with the US grew to €62.1 billion in the months from January to May from €55.4 billion the same time last year, EU statistics office Eurostat said today.

With China, the EU’s trade deficit expanded to €76.7 billion from €69.2 billion.

The US has hit the European Union with tariffs and threatened more in complaint over the trade balance. Both Washington and Brussels have also complained that China wants free trade without playing fair.

Overall, the goods trade deficit of the 28-nation bloc widened to €14.2 billion in the five month period from €9.9 billion a year earlier.

Energy imports, notably from Russia and Norway, were the chief cause of the deficit.

For the narrower 19-country euro zone, exports grew by 7.1% year-on-year in May and imports by 4.2%, leading to a widening of its trade surplus to €23 billion in May from €16.9 billion a year earlier.

On a seasonally adjusted basis, the euro zone’s trade surplus also increased to €20.2 billion in May from €15.7 billion in April as exports rose by 1.4% month-on-month and imports declined by 1%.

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EU goods surplus with US eases, deficit with China widens

EU goods surplus with US eases, deficit with China widens

The European Union’s trade surplus in goods with the US decreased in the first three months of 2019, but its deficit with China widened, figures released today showed.

The 28-nation bloc’s surplus with the US slipped to €33.9 billion in the three months from January to March, from €36.2 billion the same time in 2018, EU statistics office Eurostat reported.

With China, the EU’s trade deficit expanded to €49.4 billion from €46.9 billion.

In the months from January to February, the EU trade surplus with the US had risen, while its deficit with China expanded.

The US has hit the European Union with tariffs and threatened more while complaining over the trade balance. Both Washington and Brussels have also complained that China wants free trade without playing fair.

Overall, the goods trade deficit of the 28-nation bloc increased to €24 billion in the first quarter from €9.6 billion a year earlier.

Energy imports were the chief cause of the deficit, especially from Russia and Norway.

However, the sharpest movements were related to trade from Turkey and South Korea, the EU’s trade balance with both turning from a surplus to a deficit.

For the 19-country euro zone, exports grew by 3.1% year-on-year in March and imports by 6%, leading to a decline of its trade surplus to €22.5 billion from €26.9 billion a year earlier.

On a seasonally adjusted basis, the euro zone’s trade surplus also decreased to €17.9 billion in March from €20.6 billion in February as exports increased by 0.9% month-on-month and imports rose by 2.5%.

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Trade war escalation puts Europe’s shaky economy back on alert

Trade war escalation puts Europe’s shaky economy back on alert

The US and China are taking another swing at global sentiment, which is bad news for Europe as the economy starts to find its feet after a torrid year. In a week that was supposed to bring progress in trade talks, President Donald Trump boosted tariffs on $200bn of goods and threatened more. China said it will be forced to retaliate, though it hasn’t yet given details.

The escalation will have a global impact, but for the euro area it brings to life one of the “pronounced” risks highlighted this week by the European Commission in its latest (gloomy) economic assessment. The region is also facing its own US deadline: Trump is due to decide by May 18 whether to slap levies on car imports, though the date could be extended. “We’re at a very fragile position in the global economy; we’re seeing an industrial recession in most parts of the world,” said Zurich strategist Guy Miller.

“The uncertainty this creates means the global trade situation, which is already fragile, is going to be very vulnerable.”

The US-China setback follows figures suggesting the euro-area economy was starting to stabilise. First-quarter growth was better than anticipated and surveys of activity bottomed out after tumbling through 2018. In Germany, industrial production and orders grew in March.

But confidence remains fragile, with a commission measure for the eurozone at the weakest in more than two years. “A quarter of our members have exports to the US that were already affected by these ridiculous tariffs,” said EU Chamber of Commerce in China president Mats Harborn. Increasing tariffs to 25pc “will prove extremely damaging to those companies, and the collateral damage will ripple around the globe”.

The latest tit-for-tat is likely to worry EU leaders. They agreed on a trade pact with Trump last year and are working to prevent more tariffs on EU products.

Moreover, Europe’s worries could be moot: The US-China talks may ultimately succeed. A deal would help support the view of a better second half for the euro-area economy. Failure, though, “would mean persistent (trade) uncertainty and flat-lining growth rather than a return above potential next year,” Bank of America Merrill Lynch analysts said in a note.

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‘American selfishness on trade’ criticised by EU

‘American selfishness on trade’ criticised by EU

EUROPEAN Commission vice-president Jyrki Katainen said on Tuesday that Washington’s “selfish” approach to trade was not sustainable, but it was too early to say that EU-US trade talks were doomed to fail.

The Trump administration has imposed stiff tariffs on US imports of steel and aluminium and set off a trade war with China in a bid to redress what it sees as unfavourable terms that contribute to a US trade deficit of over half a trillion dollars a year.

The Commission, which negotiates trade agreements on behalf of the 28-nation European Union, has been in talks with US authorities since last July, seeking to clinch a deal on industrial goods trade.

EU governments are now discussing the details of a negotiating mandate for the Commission, while Washington has until mid-May to decide whether to make good on President Donald Trump’s threat to impose tariffs on imports of European cars.

“It is too early to say that our trade discussions are doomed to fail,” Mr Katainen told a regular news briefing.

“There are discussions going on on several levels and… we can end up having some sort of an agreement with the US on trade, but let’s not go deeper than this,” he said.

He added that the scope of negotiations had to be clear and that a deal would require a lot of good will and political capital on both sides.

Asked about a reform of the World Trade Organization (WTO), Mr Katainen said it was problematic.

“Japan, China and the EU are willing to reform the WTO, the US has not been that interested, but they are willing to cooperate,” he said.

“Even though the US authorities may think that selfishness is better than cooperation, it is not a sustainable way of thinking,” he said.

Reuters

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