MNI BRIEF: China Diverted Trade To EZ In Trump I -ECB Bulletin

The euro area saw an increase of around 2-3% of imports from China as a direct result of trade tensions between the U.S. and China during President Donald Trump’s first term in which “the effective tariff rate” between the two nations increased by almost 18 percentage points, the ECB said in its economic bulletin on Friday.

The research showed a significant decline in Chinese exports to the U.S. led China to seek other markets, with the eurozone playing an important role though less than that of east and south Asian countries. The increase in flows of Chinese goods to Canada and Mexico was slightly less than that to Europe.

The euro area was not able to take advantage of these trade tensions to increase its market share to the U.S, with other Asian nations benefiting most. (See MNI INTERVIEW: Central Bank Supply-Chain Data Old, Incomplete)