China’s imports hammered by trade war fears, as market sell-off continues – business live

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China's imports tumble as demand falls and trade war heats up

China imports have fallen sharply at the start of this year, as the prospect of a trade war with the US hits its economy.

Imports fell 8.4% year-on-year in January and February, new customs data shows, weaker than the 1% growth expected by economists.

That suggests that China’s manufacturing base could be cutting back on buying raw materials and parts, concerned that demand for their wares would fall due to new tariffs at the US border.

Lynn Song, chief economist for Greater China at ING, says:

China’s economy got off to a weak start in 2025 as exports grew just 2.3% in the first two months of the year. A sharp slump in imports, meanwhile, resulted in a bigger-than-expected trade surplus.

Looking into the detail of the import data, Song explains:

We still saw strong imports in tech-related imports, with a 54.4% YoY ytd surge in automatic data processing equipment imports. And an overall 6.4% YoY ytd growth in hi-tech product imports. However, most other categories came in weak.

Commodities imports generally contracted over the first two months of the year, with crude oil (-10.5%), natural gas (-13.8%), and steel (-7.9%) all still soft. We’re already seeing a slump in soybean imports, which fell by -14.8% YoY ytd. This was even before the impacts of China’s retaliatory tariffs on US agricultural products.

China’s exports rose, though, in the first two months of 2025 – up 2.3%.

Exports to the US rose to almost $76bn, Bloomberg reports, the highest total for January and February since 2022 when the Covid-19 pandemic was upending global trade.

US data yesterday showed that America’s trade deficit swelled to a record high in January, as firms tried to front-run tariffs by importing more goods.

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FTSE 100 on track for worst week of 2025

Unless we get a turnaround rally today, the FTSE 100 share index will post its biggest monthly loss of the year so far.

Since Monday morning, the “Footsie” has dropped by 1.8% - its biggest weekly drop since 16-20 December last year.

Richard Hunter, head of markets at interactive investor, says:

“Well-worn though the phrase may be, markets hate uncertainty – and investors are getting it in spades.

The constant changes of tack emanating from the White House on tariffs are beginning to test investors’ patience, not least because the differing messages have different implications for highly interconnected global markets. In addition, the US has seen a recent run of weakening economic data, quite apart from any inflationary and recessionary fears that investors are harbouring following President Trump’s aggressive tariff actions so far.

Shares have opened lower in London, at the start of the final trading day of the week.

After losses on Wall Street last night, the UK’s FTSE 100 share index is down 27 points, or 0.3% at 8655.

European markets are also lower, with the Stoxx 600 index dropping 0.4%.

The US dollar is weakening again today, down 0.25% against a basket of currencies.

The pound is up 0.2 cents to $1.2904, towards the four-month high touched yesterday.

The euro has gained half a cent, to $1.0831, which is also the strongest since last November.

UK house price dip 0.1%

In the UK, house prices edged down last month, lender Halifax reports.

The average UK house price dipped by 0.1% in February, lowering the average property price down to £298,602, down from £298,815 in January.

Annual house price inflation remained unchanged at 2.9%, while in Scotland they rose by 3.8% – the fastest pace in 13 months.

Amanda Bryden, head of mortgages at Halifax, says:

“February’s figures highlight the delicate balance within the UK housing market. While there’s been talk of a last minute rush on new mortgages ahead of the changes to stamp duty, inevitably we’ve seen some of the demand that was brought forward start to fade as the April deadline ticks closer, given the time needed to complete a purchase.

That may help to explain why growth in first-time buyer property prices eased in February, falling to +2.4%, in contrast to homemover price inflation which accelerated, reaching +3.7%.

House price growth remains hesitant as UK prices took a -0.1% step back in February, making the average property price now £298,602 according to lender @HalifaxBank
Annual growth however remained steady at +2.9%, but Scotland saw house prices rise at the fastest pace in 13… pic.twitter.com/rmFfZSNOl9

— Emma Fildes (@emmafildes) March 7, 2025

German factory orders tumble

Factory orders in Germany have slumped, showing the challenge facing chancellor-in-waiting Friedrich Merz.

German industrial orders fell by 7.0% month-on-month in January, the federal statistics office reported this morning. Excluding large orders, incoming orders were 2.7% lower than in the previous month.

On an annual basis, orders were 2.6% lower than a year ago.

Chinese foreign minister Wang Yi has accused Washington of “meeting good with evil”, as anger over Donald Trump’s tariffs continues to bubble up.

Wang told a press conference today, on the sidelines of the country’s annual parliamentary session, that China will continue to retaliate to the United States’ “arbitrary tariffs”.

Associated Press reports:

Wang said China’s efforts to help the U.S. contain its fentanyl crisis have been met with punitive tariffs, which are straining their ties.

“No country should fantasize that it can suppress China and maintain a good relationship with China at the same time,” Wang said. “Such two-faced acts are not good for the stability of bilateral relations or for building mutual trust.”