Daily Memo: Slow Trade Growth in Germany, Fallout From the Hong Kong Bill

Europe’s economic engine is recovering modestly.

Slow recovery in German trade. Germany’s Federal Statistical Office released new trade figures on Thursday showing initial signs of recovery. Exports increased by 9 percent in May over the previous month (calendar and seasonally adjusted) as lockdown measures were eased. Imports also increased, by 3.5 percent over April (calendar and seasonally adjusted). On an annual basis, however, the figures are much more daunting. Exports fell in May by 29.7 percent year over year, and imports by 21.7 percent. Exports to countries outside of the European Union decreased by 30.5 percent year over year while exports within the eurozone declined by 29.1 percent. The steepest drop was in exports to the U.K., a major trade partner for Germany, which fell by 46.9 percent to 3.5 billion euros ($4 billion). Exports to the U.S. declined by 36.5 percent to 6.5 billion euros and to China by 12.3 percent to 7.2 billion euros. These figures indicate that, although the recovery has started, the German economy has a long way to go before reaching pre-pandemic levels. Asia-Pacific responds to the Hong Kong bill. A flurry of strategic defense discussions are underway in the Asia-Pacific as the fallout from China’s Hong Kong security bill continues. […]

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