China's exports to the US sink but beat forecasts as tariffs bite

Euronews

09-05-2025

Germany's Commerzbank posted better-than-expected results for the first three months of 2025. Instead of the anticipated declining net income, the bank's net result increased by 12% to €834 million.
The lender's revenues increased by 12% to €3.1 billion, while net interest income was slightly less than a year ago, standing at €2.07bn at the end of the first quarter of 2025. Meanwhile, the net commission income, driven by a strong securities business, grew by 6% to €1bn in the same period.
'We achieved the highest quarterly profit since 2011, demonstrating that we can grow even in economically challenging times,' Commerzbank CEO Bettina Orlopp said. 'We are progressing with the implementation of our strategy 'Momentum'. We plan to return more capital to our shareholders in the coming years.'
Commerzbank completed a share buyback programme of €1bn starting from November 2024, and it also proposes to pay a dividend of €0.65 per share, which will be decided at the Annual General Meeting on 15 May 2025.
The better-than-expected results are coming at a time when the German bank is making efforts to fend off Italian banking group Unicredit's takeover advances.
Unicredit has recently acquired a large stake in Commerzbank, raising its stake to 29.9%, just short of the 30% threshold at which Unicredit is required to make a public offer for the entire bank.
In February, Commerzbank announced cost-cutting measures, including job cuts of about 10% of the bank's workforce, to fend off any takeover bid by the Italian bank.
The German lender's employee representatives are also organising a protest against a possible takeover, scheduled just hours before Commerzbank's annual general meeting on 15 May.
The German bank said that this year it expects a higher net result of around €2.4bn for the full year, after restructuring expenses.
The bank set aside €40m for restructuring expenses in the first quarter, for an early partial retirement programme, which the bank will offer later this year. It is part of the job reductions, the lender is currently negotiating with the employee representative committees.
Furthermore, to preserve profitability, Commerzbank reduces its dependence on net interest income –the difference between what it earns from loans and pays for deposits–as interest rates fall.
The return on tangible equity improved to 11.1% from last year's 10.5% in the first quarter, which is seasonally strong. 'We are on track to reach our full-year target of around 9.6%,' Commerzbank CFO Carsten Schmitt said. 'At the same time, we are reducing our dependency on net interest income. We confirm our outlook for 2025.'
China's exports to the United States tumbled in April while its trade with other economies surged, suggesting that President Donald Trump's tariffs offensive is hastening a shakeup in global supply chains.
Total exports from China rose 8.1% last month from a year earlier, much faster than the 2% pace most economists had been expecting. That was — however — much slower than the 12.4% year-on-year increase in March. Imports fell 0.2% in April from the year before.
Shipments to the US sank 21% in dollar terms as Trump's tariffs on most Chinese exports rose to as high as 145%. With Chinese tariffs on US goods at 125%, business between the two biggest economies has grown increasingly uncertain.
China's imports from the US dropped more than 13% from a year earlier, while its politically sensitive trade surplus with the United States was nearly $20.5 billion (€18.2bn) in April, down from about $27.2bn (€24.2bn) a year earlier.
In the first four months of the year, China's exports to the United States fell 2.5% from a year earlier, while imports from the US fell 4.7%.
A potential break in the tariffs stalemate could come as soon as this weekend. Treasury Secretary Scott Bessent and other senior trade officials are due to meet with Chinese officials in Geneva on Saturday. But Beijing and Washington are at odds over a raft of issues, including colliding strategic interests that will may impede progress in the talks.
Some of the punitive tariffs, including Beijing's retaliatory 125% tariffs on US exports, could be rolled back, but a full reversal is unlikely, Zichun Huang of Capital Economics said in a report.
'This means China's exports to the US are set for further declines over the coming months, not all of which will be offset by increased trade with other countries. We still expect export growth to turn negative later this year,' Huang said.
Whatever the outcome of those discussions, the rapid increase in Chinese exports to other countries reflects a restructuring that began years ago but has gained momentum as Trump has raised barriers to exporting to the US.
Global manufacturers have been looking for alternatives to a near total reliance on manufacturing in China after disruptions from the COVID-19 pandemic highlighted the need for more diverse options.
The need for more versatile supply chains grew more apparent as Trump hiked tariffs on Chinese exports during his first term in office. Most of those remained during former President Joe Biden's term.
Exports to the United States accounted for about a tenth of China's total exports in April and the US is still China's largest single-country market. But the European Union and Southeast Asia are larger regional export markets.
Trade with a broader grouping, the 15-nation Regional Comprehensive Economic Partnership (RCEP), which does not include the United States, is still bigger. And exports to countries participating in China's 'Belt and Road Initiative,' a vast network of Beijing-supported infrastructure projects, are bigger still.
In the first four months of the year, exports to the 10-nation Association of Southeast Asian Nations rose 11.5% from a year earlier, and those to Latin America also climbed 11.5%. Shipments to India jumped nearly 16% by value, and exports to Africa surged 15%.
Some of the fastest growth was in Asia, reflecting moves by Chinese and other manufacturers to diversify their supply chains outside of the Chinese mainland. Most notable were exports to Vietnam, which jumped 18% year-on-year. Exports to Thailand were up 20%.
Back in China, preliminary figures have shown a sharp decline in shipping and other trade activity. Earlier this week, Beijing announced a barrage of measures meant to counter the impact of the trade war on its economy, which was already struggling to regain momentum after the pandemic and a lengthy downturn in its housing sector.
Both US stock markets and the US dollar rose to their highest levels in a month as risk appetite continued to recover ahead of US–China trade negotiations.
US and Chinese officials are scheduled to meet in Switzerland over the weekend, aiming to de-escalate tensions that may lead to mutual trade embargoes. The Trump administration imposed tariffs of up to 145% on imports from China, while China retaliated with 125% tariffs.
President Trump told reporters that tariffs on China may come down, expressing optimism about progress in the upcoming trade talks. 'I think it's going to be substantive,' Trump said at the White House while announcing a trade agreement with the UK. 'I think it's a very friendly meeting. They look forward to doing it in an elegant way.' When asked whether he would lower tariffs on China, he responded, 'It could be. We are going to see. Right now you can't get any higher. It's at 145%, so we know it's coming down. I think we're going to have a very good relationship.'
US stock markets and the dollar had experienced sharp sell-offs throughout much of April amid growing recession fears. Late last month, however, the US president shifted his stance on China, signalling that tariffs would be reduced 'substantially.' Since then, Wall Street and the dollar have reversed course, with investors appearing to reload US assets amid signs of easing trade tensions.
'This country will hit a point that you better go out and buy stock,' Trump said on Thursday, referring to the trade deal with the UK and a recently signed tax bill as potential catalysts for the markets. 'This country will hit a point that you better go out and buy stock now.'
Trump's comments and growing optimism over trade talks have sparked a broad-based risk-on rally in financial markets, particularly in US assets. Equities climbed, the dollar strengthened, oil prices rebounded, Bitcoin surged, while gold retreated.
US stock markets rose for a second consecutive session on Thursday, with the Dow up 0.62%, the S&P 500 rising 0.58%, and the Nasdaq Composite gaining 1.07%. European equities continued to outperform their US counterparts, with the DAX nearing a record high, up 1.02%, and the Euro Stoxx 600 advancing 1.1%. Meanwhile, futures are pointing to a higher open on both sides of the Atlantic markets.
Asian markets were mixed in Friday's session as investors remained cautious ahead of the trade talks. As of 5:00 a.m. CEST, Japan's Nikkei 225 rose 1.32%, the ASX 200 gained 0.41%, while South Korea's Kospi slipped 0.1% and Hong Kong's Hang Seng Index declined by 0.15%.
In currency markets, the US dollar index surged by over 1% to above 100 for the first time since 11 April. The dollar's rebound weighed on other major currencies in the G10 group, particularly the euro. The EUR/USD pair fell to just above 1.12 during Friday's Asian session, its lowest level in nearly a month, down from a multi-year high above 1.15 in late April. The euro had been seen as a haven asset, having gained around 1,000 points (100 points = 1 US cent) against the dollar since February.
Gold prices declined for a second consecutive day, as easing safe-haven demand pressured the precious metal. Gold futures on COMEX dropped 2.5% on Thursday, with a slight rebound to $3,318 per ounce as of 5:00 a.m. CEST. Spot gold fell 3.6% over the past two sessions to $3,313 per ounce.
In contrast, crude oil prices surged to their highest level in a month. West Texas Intermediate (WTI) futures rose above $60 per barrel by 5:10 a.m. CEST, marking a 3.5% increase since Thursday's open. Brent futures similarly rallied, climbing above $63 per barrel.
Bitcoin jumped as much as 6.3% to trade above $103,000 (€91,770), the highest level since 31 January. Cryptocurrencies, often considered high-risk assets, have demonstrated a strong positive correlation with US technology stocks. Trump's pro-crypto stance previously lifted Bitcoin reach an all-time high of over $109,000 on 20 January.