00:00Let's talk now to Mark Oswald, the Chief Economist and Global Strategist at ADM Investor Services International.
00:06Mark, welcome back. Good to see you. Well, tariffs, what tariffs?
00:13Indeed, the strength across the board in non-US trade was really quite remarkable.
00:21Pretty much 27% to 29%, whether one looks at ASEAN, India, South Korea.
00:29The EU was about 23%, Canada 20%, Australia 29%.
00:36And, you know, in part it is due to base effects.
00:41We saw that, above all, in things like clothing and textiles, which showed a massively strong rebound in the first
00:51two months of the year after a protracted period of weakness, which saw them fall about 10% in 2025.
00:57But, above all, it's electronics and the shortage of memory chips, which were exports of which were up about 66
01:06.5% relative to last year, which drove this.
01:11So, there's a lot of underlying strength there.
01:15I wonder where all of this then leaves U.S. tariffs policy.
01:21Well, certainly one thing one can say is that the striking down of tariffs, the reciprocal tariffs by the Supreme
01:29Court, probably won't actually have that much impact on U.S.-China trade.
01:34China is, I think, you know, this is made a good example of there's plenty of other places that China
01:41can export to outside of the U.S.
01:44and the demand, above all, in Asia and certainly the EU, because it is de-industrializing and requires ever more,
01:54and strength in demand for electronic autos is certainly helping that.
02:00The only caveat I have in all of this is a lot of this strength isn't really creating a lot
02:06of jobs in China,
02:08and that is something which is going to need to be worked on.
02:13I wonder what these numbers mean ahead of this anticipated meeting between the President of China and the President of
02:20the United States.
02:23Well, it certainly means that China can, you know, with an ever-shrinking dependency in terms of its export profile
02:32on the United States,
02:34which probably accounts for a little more than 12% to 14% of total exports now,
02:39can say, you know, we're not particularly worried if you threaten us with more tariffs.
02:47There's a limit to that, but strategically, it will also, you know, want to be looking at all the disruption
02:55that is now happening to supply lines out of the Middle East, particularly in the energy and petrochemical sectors,
03:02and that will definitely be a very hot topic of discussion at that meeting between President Trump and President Xi.
03:11And for China, how encouraging is it that imports increase by nearly 20%?
03:20I think it's paced by certain things.
03:25The demand in terms of raw materials is really more demand for things which are going to likely to be
03:32exported in finished goods terms.
03:37You know, there are pockets of strength there, but still the underlying weakness in private consumption remains,
03:46and that really will depend on creating a broader social safety net, as is intended and has been announced,
03:59and above all in stimulating the small manufacturing sector,
04:07which has been exporting in a lot of cases almost exclusively to the United States
04:12and encouraging them to focus elsewhere, be it Asia, be it the EU, be it Africa.
04:19Mark, good to see you. Thanks so much for your time.
04:21Mark Oswald, the Chief Economist and Global Strategist at ADM Investor Services International.
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