Trade conflicts

The Chinese trade balance for the long of September was published yesterday. Both exports and imports were up more than expected. Exports increased 8.3%, even after a 27% decline in exports to the U.S., which marks the sixth month of double digit declines. This is showing how resilient and resourceful China is when it comes to trade. Imports went up 7.4% vs an anticipated 1.5%, which tells us our understanding of Chinese tarde mechanics is still very low. But pressure keeps mounting on China, not only from the U.S. perspective and their fight over rare earth metals, but from the EU as well. Today, the Netherlands announced it’s taking control of Nexperia, a subsidiary of Wingtech, a chinese chip maker, under the Goods Availability Act that allows them to secure certain assets if they consider, unilaterally, that it’s a matter of national security or national emergency. Trade and technology are fully intertwined with geopolitics, and the tension between East and West is increasing, which make trade talks extremely important to avoid escalation.

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