BEIJING — China’s export engine slowed in March as buyers chasing an artificial intelligence (AI)-fueled future ran into the hard reality of war in the Middle East, which has sparked an energy shock and complicated Beijing’s push to keep growth on track.

Outbound shipments from the world’s second-largest economy grew an annual 2.5%, customs data showed on Tuesday, a five-month low, and slowing from a 21.8% gain in the January-February period. They sharply undershot forecasts for 8.3% growth in a Reuters poll.

Imports rose 27.8%, the best performance since November 2021, compared with a 19.8% increase over January and February and forecasts for 11.2% growth.

March marks the first real stress test of whether enthusiasm for artificial intelligence — and the chips and servers it demands — could offset gloom unleashed by the global energy shock after Iran’s closure of the Strait of Hormuz, the strategic waterway for the world’s 20% of oil and gas flows.

Natural gas imports for March dropped an annual 10.7%, the lowest level since October 2022, while crude imports fell 2.8%, with Chinese vessels also getting stuck in the Strait.

China roared into 2026 with outbound shipments far outstripping forecasts, powered by tech exports, raising the prospect it could smash last year’s record $1.2-trillion trade surplus. The Iran war casts doubts about that trajectory.

Even China, long criticized by trading partners for subsidy-backed, cut-price manufacturing, is not insulated from the hit to buyers’ purchasing power as fuel and transport costs rise.

Still, Chinese producers may yet gain ground as buyers seek cheaper options, said Fred Neumann, HSBC’s chief Asia economist. Decades of commodity stockpiling have also helped blunt the impact of raw material shocks on factory gate prices, he said.

China’s exports of refined oil products rose 20.5% month on month, totaling 4.6 million metric tons.

The figures were further muddied by the seasonal effects of a late Lunar New Year national holiday, said Xu Tianchen, senior economist at the Economist Intelligence Unit, during which factories shut as workers down tools to celebrate.

“This explains the decline across the low-value added sectors, textiles, garments, bags, toys, furniture, as they are reliant on migrant workers,” Mr. Xu said.

A high base is also a drag, after Chinese factories rushed shipments a year earlier to beat US President Donald J. Trump’s April 2 “Liberation Day” tariff deadline.

South Korea’s exports to China — a bellwether for Chinese demand — rose 62.4% in March, led by a 151.4% surge in global semiconductor shipments on higher memory prices and robust AI-driven server demand.

March factory activity data out of China showed goods exports continued to support growth, but the war in Iran weighed on sentiment as commodity prices rose sharply, lifting input costs.

China’s trade surplus came in at $51.13 billion in March from $214 billion over January and February.

Mr. Trump is expected to visit China for a meeting with Chinese President Xi Jinping in May, where analysts see scope for deals on farm goods and aircraft parts but little chance of movement on flashpoints like Taiwan. — Reuters

BRUSSELS — The European Union (EU) reached a preliminary deal on Monday to nearly halve imports of steel and impose tariffs of 50% on excess shipments to protect the bloc’s steel industry from overproduction elsewhere.

EU steel producers are operating at only 65% capacity due to rising imports and 50% tariffs imposed by US President Donald J. Trump. The new measures are designed to push capacity utilization up to 80%.

Representatives for the European Parliament and the Council, the body representing EU governments, agreed late on Monday to limit tariff-free imports to 18.3 million metric tons per year, a 47% cut compared to 2024, with a doubling of the out-of-quota duties.

Last year, the main sources of steel imports into the EU were Turkey, South Korea, Indonesia, China, India, Ukraine, and Taiwan.

EU steel is currently protected by safeguards, put in place during Mr. Trump’s first term, with import quotas and 25% tariffs above those limits. However, under World Trade Organization rules, they must expire after eight years — on June 30.

The European Commission, which proposed new measures in October, said the EU steel sector has lost some 100,000 jobs since 2008, and output would decline even further without extended restrictions.

The new measures will take more into account where imported steel was originally melted and poured to avoid circumvention and be regularly reviewed to ensure they are effective.

The parties also committed to phaseout imports of steel from Russia swiftly, possibly by September 2028. Some 3.7 million tons of steel slabs came from Russia to the EU last year.

The parliament and council will need to vote on Monday’s agreement for the measures to enter force. — Reuters

PARIS — US officials who met leaders of France’s far-right National Rally (RN) were underwhelmed by their economic plans, two diplomatic sources said, in a blow to the party’s efforts to present itself as a credible steward of the euro zone’s No. 2 economy before next year’s election.

The National Rally has become France’s largest parliamentary party — and a potential victor in 2027 — by coupling a hardline stance on immigration with populist pledges to defend jobs and purchasing power. But its longstanding rhetoric around state interventionism and protectionist policies worries French blue-chips and investors.

US Ambassador Charles Kushner and his team have met with most of the likely presidential contenders from across France’s political spectrum, including National Rally party chiefs Marine Le Pen and 30-year-old protege Jordan Bardella.

While they were not particularly swayed by any of the candidates they met, the RN’s views on how to cut a yawning deficit, win US investment and get the economy moving were a concern, the sources said.

Reuters granted the sources anonymity to allow them to speak frankly about private discussions.

Their conclusion echoed concerns among many in France’s business elite about whether the RN has the experience or expertise to steer the highly indebted $3.5-trillion economy back to robust growth and steady the country’s public finances.

The RN did not respond to a request for comment on the US officials’ view. A senior aide to Mr. Bardella said the party was working to develop its economic program, including politically sensitive structural reforms to France’s costly pension system.

A State Department spokesperson declined to comment on “private diplomatic exchanges.”

ELECTION HEADACHE
Doubts over the RN’s economic program may pose an electoral hurdle in France and shape US thinking on whether to vocally support the RN in 2027, when polls suggest it could win.

US President Donald J. Trump’s administration has backed ideological allies in Europe, but with mixed results. A US push to help Hungarian Prime Minister Viktor Orban win re-election backfired when he lost power after 16 years on Sunday.

One of the diplomatic sources said there were no signs RN leaders were seeking US support, and European far-right and populist parties that once cheered Mr. Trump are increasingly wary of being seen as too close.

France’s economy is mired in a morass of feeble growth, high borrowing costs and a debt burden that is one of Europe’s heftiest at 115.6% of gross domestic product.

The RN says its economic priorities include boosting household purchasing power through tax cuts, reducing public spending and France’s EU budget contribution, and restructuring welfare to prioritize French citizens.

But detailed plans have yet to emerge. Critics say the party lacks a coherent economic manifesto.

US officials were concerned by a combination of mixed messaging on the economy, including the RN’s desire for a costly rollback of a 2023 pension reform that raised the retirement age, and unclear plans on how to trim the deficit, the sources said.

They were also irked that the RN voted in favor of a budget amendment doubling to 6% a digital services tax that Washington opposes on the grounds it targets US tech giants, the sources added. The amendment never made it to the final 2026 budget.

RN’S LE PEN MET CEOS
Business leaders earlier this year told Reuters they were confused by the divergent economic currents within the party leadership, with Ms. Le Pen seen as a big-spending populist, and Mr. Bardella seeking to chart a more pro-business path.

That ambiguity initially helped the RN broaden its support but has become a liability as the party seeks to present itself as a credible government-in-waiting, executives say.

Despite making headway with voters, the RN, a party long shunned by France’s political and economic elites, has been struggling to make headway with France Inc.

But in a sign chief executive officers (CEOs) want to understand the party’s economic program as the April 2027 election edges closer, Ms. Le Pen met with the bosses of luxury group LVMH, oil major TotalEnergies, insurer AXA and Renault among others on April 7, two other officials said.

Fund manager François Durvye, whom Mr. Bardella brought on as an economic adviser, helped facilitate the meeting, one official said. The same official summarized the meeting as a heated Q&A session.

The second official, a senior figure in the RN, said the meeting was designed to dispel “the caricatures that are often painted of our program, which is in fact the most pro-growth and pro-business program across the political spectrum.” — Reuters