Trump’s outbursts are hardly surprising anymore, but this one couldn’t be more wrong:
“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE…”
President Trump also suggested that he would impose a 50% import tariff on all EU goods starting June 1st. Two days later Trump said he will postpone the 50% tariffs on EU until July.
During a visit to a factory in Henan on May 19, Xi reinforced his strong personal belief: manufacturing is the foundation of a nation. This reflects the shortages of many goods he experienced—he has mentioned the lack of soap shortly before reaching adulthood—and his words echo Soviet-era leaders who saw manufacturing as the backbone of national strength and industrial output as an economic emblem to admire.
Wary of relying on consumption, Xi appears to see it as a trap laid by liberal economies to weaken other nations. There will be measures to “guide consumption” in the orderly manner the Party wants – that is, to boost the supply side, but don’t hold your breath if you think a shift to consumption as a key driver of economic growth and prosperity is underway.
Chinese car manufacturers shifted to exporting more hybrid vehicles to the EU in an effort to avoid punitive tariffs. However, the increase in hybrid shipments was not enough to offset the sharp decline in pure electric vehicle exports, which dropped by 31%. Overall, imports of new energy vehicles from China fell by 7% in the first quarter.
Hybrid car exports from China jumped 71% in early 2025, but a 13% drop in pure electric car shipments pulled total new energy vehicle exports down nearly 8% compared to last year.
EU demand for laptops from China remained stable in Q1 2025, with imports totaling 12 million units, unchanged from a year earlier. The average CIF price also stayed flat at €500.
Source: EUROSTAT
To grasp the staggering volume shipped by Temu, Shein, AliExpress, and others, consider this: on average, they ship goods worth roughly $700 to the EU every single second, according to China Customs data. That’s equivalent to 200 swimming suits per second.
In Q1 2025, the average CIF price of cellphones imported from China to the EU fell to €302, down from €311 in the same period last year. Import volumes also dropped by 16%, from 18.6 million units in Q1 2024 to 15.6 million this year.
Source: EUROSTAT
EU imports of cellphones and laptops from Vietnam rose by €1.2 billion in Q1 2025 compared to the same period in 2024.
Exports of French cognac to China appear to have plunged, hit by a Chinese probe launched in retaliation for EU tariffs on electric cars.
In reality, the impact is over 2024 since Q1 2025 exports and the 10-year average are roughly the same.
Chinese garlic has long been a headache for Spanish growers. Spain accounts for less than 1% of global production, while China supplies nearly three-quarters of the world’s garlic. But with fresh U.S. tariffs imposed by the Trump administration, the headache has turned into a full-blown nightmare. Chinese producers are now rerouting to Spain, following a familiar playbook: undercutting prices. This year, average prices are down 7% from last year, while Chinese garlic shipments to Spain have jumped nearly 20%. Just another spillover from the ongoing trade war.
In April 2025, the renminbi fell to the fifth most active currency for global payments by value, down from fourth place in March. Its share dropped to 3.5%, compared to 4.13% the previous month. The total value of RMB payments declined by 14.14%, while global payments in all currencies rose by 1.35% over the same period.
Mexico presents itself as neutral in the U.S.–China trade dispute, but that label says little. Diplomatic vagueness is unlikely to help. To keep Chinese investment coming, Mexico is trying to reassure Washington that it won’t become a simple re-export hub for Chinese goods. However, it’s doubtful the U.S. will be convinced, and just as doubtful that Chinese investors are interested in building real added value in Mexico.
The Mexico–China Chamber of Commerce estimates that Chinese investment in Mexico will reach around $4 billion in 2025. What it doesn’t mention is the trade balance. In 2024, China ran a $71 billion trade surplus with Mexico — about 18 times greater than its investment. Meanwhile, Mexico enjoyed a staggering $174 billion trade surplus with the U.S., roughly equivalent to 10% of its GDP. In light of these numbers, calling neutrality a “solution” seems more like wishful thinking than a workable strategy.
If National Development and Reform Commission director Zheng Shanjie says the combined economic expansion over the current Five-Year Plan is expected to reach 30 trillion yuan, then estimating GDP growth for 2025—the final year of the 14th Plan—becomes fairly straightforward: about 4.6% in real terms.
However, it’s worth noting that this combined expansion is measured from the 2020 output—a particularly weak year economically due to COVID, when China’s growth was just around 2.2%
Driven by an 11% drop in the price of Russian crude and a 14% decline in import volumes, China’s imports from the Russian Federation fell 9% in the first four months of the year. Meanwhile, despite all the brouhaha over tariffs, China’s imports from the U.S. dropped by less than 5%.
The U.S. government has warned against using certain advanced chips made by Chinese companies, including Huawei’s Ascend 910A, 910B, and 910C. These chips fall under strict export controls, and using them without authorization could violate U.S. rules and lead to serious penalties.
If we interpret the guideline correctly, it amounts to a ban on the use of such chips in any form by any organization, whether in the U.S. or elsewhere.
Meanwhile, China announces retaliation, without yet explaining in what form. It will likely invoke its Anti-Foreign Sanctions Law enacted in 2021. The law allows Chinese individuals and entities to sue for damages in Chinese courts if they suffer losses due to foreign sanctions, though China usually prefers state-led countermeasures
Still below the 2018 all-time high.
With the industry caught in a brutal price war, nearly the entire sector operating at a loss, and clear overcapacity, the Chinese photovoltaic sector is cutting its exports in 2025 to less than half of its peak in 2023.
From January to April, exports fell to $7.6 billion, down from $15.8 billion in the same period two years ago.
We are committed to sharing with you the best trade analysis we have to offer.
If you would like to share something with us, feel free to comment in the section below or drop us a line at [email protected]