Key events
New business secretary Peter Kyle going to China for trade talks this week
The UK’s new business secretary, Peter Kyle, will fly to Beijing this week as part of Keir Starmer’s continuing efforts to revitalise the UK’s trade relationship with China and provide growth to the British economy.
The former science and technology secretary, who was promoted in Friday’s government reshuffle, is expected to land in China on Wednesday, picking up the schedule of his predecessor, Jonathan Reynolds, who is now the chief whip.
Kyle was due to fly to Washington on Sunday evening as part of the preparations for Donald Trump’s state visit to the UK and then meet in Beijing with the Chinese minister of commerce, Wang Wentao, at the first gathering of the UK China joint economic and trade commission (Jetco) for seven years.
Introduction: US tariff tensions hit Chinese export growth, slowest in six months; oil prices climb
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
China’s export growth slowed to the lowest in six months in August, as Beijing shipped less to the US amid tariff tensions.
Exports from China rose by 4.4% year-on-year, according to official figures, less than economists had expected, and down from July’s better-than-expected 7.2% increase. Imports grew by 1.3%, down from a 4.1% rise in July.
Beijing’s shipments to the US fell by 33% while exports to southeast Asian nations rose by 22.5%. Policymakers want manufacturers to shift to other markets in light of Donald Trump’s erratic trade policy.
The US president delayed sweeping tariffs on China in mid-August, announcing another 90-day pause just hours before the last agreement between the the world’s two largest economies was due to expire.
Trump had threatened tariffs on China as high as 245%, with China threatening retaliatory tariffs of 125%. However, Chinese imports are subject to a a baseline tariff of 10% and a 20% extra levy in response to fentanyl smuggling allegations against China. Some products are taxed at higher rates.
China’s trade surplus rose to $102.3bn in August from $98.2bn in July, but below June’s $114.8bn. Analysts are waiting to see whether officials will rollout extra fiscal support measures in the fourth quarter to revive domestic demand.
Separately, Germany’s exports fell unexpectedly in July while industrial production rose.
Shipments from Europe’s biggest economy dropped by 0.6% from the previous month, against economists’ forecasts of a 0.1% gain. Imports were also down, by 0.1%. The country’s foreign trade surplus reduced to €14.7bn from €15.4bn in June, and compared with €17.7bn in July 2024.
On a brighter note, German industrial production rose by 1.3% in July.
Oil prices climbed, recouping some of last week’s losses, after the oil cartel Opec and allies such as Russia, known as Opec+, agreed over the weekend to raise output at a slower pace from October on expectations of weaker global demand. The possibility of more sanctions on Russia, a major oil exporter, also rose after Moscow’s overnight strike on Ukraine.
Brent crude rose by 1.5% to $66.45 a barrel.
On Sunday, eight members of OPEC+ agreed to lift production from October by 137,000 barrels per day, far below the monthly increases of 555,000 bpd in September and August, and 411,000 bpd in July and June.
The Agenda
