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German exports power through trade tensions in May

Published 09/07/2018, 08:07
© Reuters. FILE PHOTO: Containers are pictured at a loading terminal in the port of Kiel

BERLIN (Reuters) - German exports rose by more than imports in May, widening the trade surplus, data showed on Monday, in a further sign that Europe's biggest economy remains in robust form despite trade tensions the United States.

Seasonally adjusted exports rose by 1.8 percent on the month, data from the Federal Statistics Office showed. Imports rose by 0.7 percent.

A Reuters poll had pointed to exports rising by 0.75 percent and imports falling by 0.3 percent.

"The latest weakening of the euro should bring some relief in the coming months, more than offsetting current U.S. tariffs on European aluminium and steel," said Carsten Brzeski at ING.

"Looking ahead and despite the very benign impact of trade tensions so far, a fully fledged trade war would surely leave negative marks on the German economy," he added.

Last week, finance minister Scholz warned that U.S. President Donald Trump's decision to impose tariffs on goods imported from trade partners like China and the European Union, would damage everyone.

Trump threatened last month to impose a 20-percent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States.

Trump also hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminium at the start of June, ending exemptions that had been in place since March. The EU and Canada responded with their own levies on U.S. goods.

China has also hit U.S. goods with tariffs in response to Trump's decision to impose levies on Chinese imports, spooking German manufacturers who rely on the world's two largest economies for growth.

The German seasonally adjusted trade surplus widened to 20.3 billion euros ($23.90 billion) in May from 19.0 billion euros in April. The reading topped the Reuters consensus forecast of 20.0 billion euros.

Germany's wider current account surplus, which measures the flow of goods, services and investments, fell to 12.6 billion euros from 23.5 billion euros in April, unadjusted data showed.

© Reuters. FILE PHOTO: Containers are pictured at a loading terminal in the port of Kiel

($1 = 0.8495 euros)

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