US decline splits export winners from losers - analysis

 
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Data show that overall, euro zone exports to the United States are faring better than those of some other countries. Japanese exports to the US recorded their biggest tumble in more than four years in March and exports from China fell almost 8% in February alone. In the same period, euro zone exports across the Atlantic rose 13.7%, according to unadjusted US trade figures. Italy and France are among those to record a rise in US-bound exports in recent months, helped in marketing campaign for sheep and goats’ milk cheese halloumi, and defying a fall in overall France’s case by planemaker Airbus. French statistics office INSEE estimates that France would suffer less from a slowing in US growth than Germany and Italy, because trade plays a smaller role in its economy. Some niche products are also doing well. Sales of cheese from euro zone newcomer Cyprus rose almost 25% in the 12 months to January, following the launch of a USUS exports. 

But other countries’ exports to the United States have fallen sharply. Luxembourg, for example, saw its US exports fall 20.9% in the year to January and local officials calculate that the country’s large financial services industry, geared to wealthy overseas investors, makes it more vulnerable to a US slowdown than other euro zone nations.

Portuguese exports to the United States fell 26% in the year to February and Spain’s exports dropped 7.4% in January. Even Germany, the region’s biggest exporter to the United States by volume, has felt some impact. It US-bound exports recorded their weakest result in four years in the Q4, although flows have since rebounded. In February, German exports rose 9%, including a 13.5% rise for countries outside the European Union, although a breakdown for the US share is not yet available.

German economists note the country should be more resistant to a US slowdown now than it was at the start of the decade, given the share of exports to the United States has fallen substantially to about 7.5% -- approximately the same as Brazil, China, India and Russia combined. Adolf Rosenstock, an economist at Gebser & Partner Asset Management, said the impact of slower US growth should fall short of the earlier back-of-the-envelope calculations, where one percentage point off US growth cut a third of a point from German growth. However, the fact that financial markets were more closely linked than ever before meant the current slowdown would probably hit Germany harder this time overall. “Now we no longer have to wait until the ships come into Bremerhaven to feel the impact,” Rosenstock said. “You see it in the news and you’re affected straight away. We’ve imported the credit crunch directly via the financial markets.” (Reuters)