There’s a sense that both sides are moving toward an agreement, though no concrete details have emerged yet. The talks will be complex and slow, but a trade deal would boost exports and lift energy market sentiment. We may see incremental movement in specific sectors where urgent cooperation is needed, but a full tariff rollback isn’t expected soon.
What damage has already been done to Chinese manufacturing and exports?
China’s exports to the US declined in April after 145% tariffs were imposed. Many factories in areas like Guangzhou and Zhuhai lost orders and are struggling. At the recent Canton Fair in Guangzhou, attendance from non-US buyers increased. Some factories are finding alternative markets in Europe and elsewhere, while others are still trying. It’s a difficult transition, and some are also attempting to pivot to the domestic market. Imports are less affected, as alternatives are easier to source.
Outlook for China crude oil imports for the remainder of Q2?
Imports rose 0.5% year-on-year in the first four months of the year, with March and April particularly strong due to restocking amid lower prices. State-owned and independent refiners had also reduced runs due to maintenance. But the high March import levels aren’t sustainable - we expect modest declines in May and June and refineries are still operating below capacity.