5 February 2025 – The Chinese government has responded to new US tariffs with countermeasures, including on fossil fuels. European Union continues to be criticised by the US administration. US industry back in expansion zone, job data support trend.
China responds to new US tariffs with countermeasures
Following the introduction of new US tariffs on Chinese imports, China has responded with its own measures. From 10 February, Beijing will impose 15 per cent tariffs on US coal and liquefied natural gas and ten per cent on crude oil, agricultural equipment and certain vehicles. China is also introducing export controls on strategic metals such as tungsten, tellurium and germanium.
US President Donald Trump justified the tariffs with China’s inadequate measures against drug smuggling. China’s reaction is targeted: While the stock market in Hong Kong reacted positively, developments in China remain to be seen. The renminbi also rose. A planned meeting between Trump and China’s President Xi Jinping could provide new impetus.
The EU is under pressure as the United States’ largest trading partner
As the United States’ largest trading partner, the European Union is also under pressure. The high trade deficit with the EU in particular is being criticised by the US government and has now been repeatedly cited by President Trump as a possible reason for new tariffs on goods from Europe.
Utilising opportunities for liquid gas and crude oil
In view of the Chinese counter-tariffs on fossil fuels, Europe would do well to finally take an active step towards the US administration and use the sharp rise in energy imports from the United States since 2022 as a basis not only to improve energy security in Europe, but also to bind the most important transatlantic partner more closely to itself again. Germany, France, Italy and Poland in particular, as the largest buyers of American liquefied natural gas, could finally take on a pioneering role here.
US economy shows signs of recovery despite trade conflicts
Despite the discussions about new tariffs, the US economy is sending out positive signals. The ISM manufacturing index surprisingly rose to 50.9 points, exceeding the expansion threshold for the first time since October 2022. The sub-indices for new orders and employment developed particularly well, indicating stronger demand and a stable labour market.
JOLTS data on job vacancies shows continued robustness
The JOLTS data on job vacancies also shows continued robustness: although the figures fell slightly in December, the rate of self-terminations has been above that of redundancies for six months – a sign of workers’ confidence in the job market. If the labour market report on Friday confirms this development, the US Federal Reserve is likely to consider a cautious easing of its monetary policy.
This stable economic data suggests that the US economy continues to show resilience.
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