Trump's import tariffs are hitting our exports

After rising for several months, consumer confidence in Belgium fell again in January. It dropped from -21 in December to -23. For fun, I've also included Belgian consumer confidence in the following chart. Our Belgian friends actually became more optimistic in January.

It's also striking that consumer confidence in our country is well below the long-term average, while in Belgium it's well above it. Could the sharp improvement in consumer confidence in Belgium after April 2025 have anything to do with Bart De Wever, who has been prime minister since March? You might almost say: "It's possible."

US import tariffs are restricting what other countries export to the US. According to Statistics Netherlands (CBS), the value of Dutch exports to the US in the first ten months of 2025 was 4,7% lower than in 2024. If only Dutch-made goods are considered, the decline is 8%, according to Statistics Netherlands. From July onwards, the monthly value of Dutch exports to the US was lower than in 2024. These figures may obscure what is happening. The decline in export value appears to be gaining momentum. We should keep in mind that monthly figures can be volatile. But in August, September, and October combined, the value of exports to the US was 25% lower than in 2024.

The following chart shows that the value of German exports to the US from "Liberation Day" on April 2nd of last year was lower in every month compared to 2024. German statisticians have already published the figures up to and including November. The value of German exports to the US in 2025 up to and including November was 9,4% lower than a year earlier. To keep the comparison with the Netherlands accurate: over the first ten months, the decline was 7,9%. This is roughly the same as our 8% decline for Dutch-made products.

The following figure shows that the decline in German exports to the US has had no material impact on total German exports. Exports to the US account for approximately 10% of total German exports. For the Netherlands, this figure is approximately 6%.

Taiwanese companies booked 43,8% more export orders in December than a year earlier. In November, the figure was 39,5%. For ICT goods, the increase was even 88,1%, compared to 69,4% in November. This spectacular increase is undoubtedly attributable to the widespread spending on AI. The US leads the way. Americans ordered 55,3% more from Taiwan in December than a year earlier. European companies saw a 47,0% increase, and companies in China and Hong Kong saw an increase of around 15%.

The next image shows that Taiwanese exports to the US are booming. Trump imposed a 15% tariff on goods from Taiwan, but chip manufacturers building production facilities in the US are exempt. "Liberation Day" apparently had no impact on Taiwanese exports to the US.

The immediate outlook for the German economy is starting to brighten somewhat. Two weeks ago, I reported that orders from German industrial companies had risen significantly in the three months ending November. This week, analyst sentiment improved further. The expectations component of the ZEW index rose from 45,8 in December to 59,6 in January. The index for assessing the current situation also improved: from -81,0 in December to -72,7 in January.

Meanwhile, energy prices are rising. I don't know if it's just the weather, but European gas prices have been on the rise in recent weeks. That's not the intention.

And we all know that motor fuel excise duties increased on January 1st. More accurately, the temporary excise duty reduction (from a substantial increase) from a few years ago has been partially reversed, but this amounts to the same thing. Since the excise duty increase, prices at the pump have gradually risen further. My father used to joke that he didn't notice the rising price of gasoline because he always filled up with "tenners." And that was in guilders, after all. Those were the days. In modern terms, you'd think my father was already surrendering to "shrinkflation."

I'm paying little attention to US figures this week. Statisticians there are starting to catch their breath after the shutdown, when they couldn't do their jobs. They're now catching up. Economic growth in the third quarter of last year has been revised to 4,4% (annualized, expressed in our way, it was 1,1%) compared to the second quarter, when the economy also grew by 3,8% (annualized).

This week, figures were also released for the Fed's preferred inflation measure, Core PCE, for two months simultaneously: October and November. The figures suggest inflation is not quite as bad. When Trump imposed his import tariffs, there were fears that US inflation would rise significantly as a result. So far, that hasn't been the case. Economists disagree about whether consumers will still be hit with the bill in the coming months. I suspect it will be less than expected.

The Chinese economy will have grown by 5,0% again in 2025, the same as in 2024 and in line with the target. But don't ask how. I often write that the Chinese growth model is broken. Over the past 25 years, China has grown rapidly by investing heavily in infrastructure, building large numbers of homes, and exporting significantly. But all that is no longer possible.

Local governments responsible for infrastructure are so heavily in debt that they are forced to pause. The housing market is in crisis due to excessive construction. According to figures reported this week, total fixed asset investment is expected to fall in 2025, the first decline since 1989.

House prices have also been falling for a while (down 2,7% year-on-year in December), leaving many homes "underwater." Policymakers have been trying for some time to boost domestic demand—particularly consumer spending—with the intention of making it the main growth driver. But they're not very successful. As mentioned, many households are facing paper losses on their homes, often second, speculative properties. Saving is the motto for these people. They will be doing so even more in 2025 than in 2024. Perhaps not unwise, but it does limit the growth of consumer spending.

Retail sales in December were only a meager 0,9% higher than a year earlier. The following chart suggests that the Chinese consumer is increasingly sluggish.

The fact that the Chinese economy managed to grow in 2025 was due to rising exports. This is also reflected in industrial production, which was 5,2% higher in December than a year earlier, compared to 4,8% in November. If production continues to grow strongly while consumption does not, goods that cannot be sold domestically will have to be sold abroad. However, this growth engine is threatened by rising protectionism. Other countries refuse to accept being inundated with subsidized Chinese products. Meanwhile, the Chinese government has concluded agreements that effectively hinder China's exports. But Chinese policymakers will do everything in their power to keep their own exports going.

Closing
Dutch consumer confidence is weak and fell in January. Rising energy prices won't help, but hopefully, the increase is temporary.

Our exports to the US are declining, but we're not alone in this. Taiwan, in fact, is exporting significantly more to the US. This is undoubtedly largely due to AI.

Optimism about the outlook for the German economy is growing. This is understandable, given the proposed expansionary fiscal policy.

American statisticians are catching up on the backlog that arose during the shutdown. They couldn't do their work then, and we were left without official statistics. The publication schedule is a bit chaotic at the moment, but the picture is clear: the economy is performing reasonably well, and inflation is moderate.

The Chinese economy is expected to grow by 5% by 2025, which was precisely the target. However, underlying challenges are significant. Investment in housing and infrastructure is declining, and consumer spending is significantly weakening. Exports are keeping economic growth afloat, but protectionism poses a direct threat.

Hans de Jong

Han de Jong is a former chief economist at ABN Amro and now a resident economist at BNR Nieuwsradio, among others. His comments can also be found on Crystalcleareconomics.nl

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