China's export growth expected to edge up in June amid delicate truce with US: Reuters poll

Yahoo

11-07-2025

By Ethan Wang and Joe Cash
BEIJING (Reuters) -China's export growth likely edged higher in June, buoyed by exporters rushing to front-load shipments on fears that a fragile trade truce with the United States could unravel and see President Donald Trump reinstate extra tariffs on Chinese goods.
Outbound shipments were expected to have risen an annual 5.0% in value terms, according to the median forecast of 23 economists in a Reuters poll, up from a 4.8% increase in May.
Imports likely grew 1.3% last month, reversing a 3.4% slump in May, as domestic demand continued to show signs of recovery off the back of policy support introduced late last year.
Trump's erratic trade policy - marked by multiple rounds of tit-for-tat tariff hikes with Beijing - has heaped pressure on China's export-oriented economy, posing a serious test to its long-standing growth model.
A tentative tariff truce reached during May talks in Geneva was nearly derailed after Washington accused Beijing of stalling on its pledge to ease restrictions on rare earth exports, crucial to industries ranging from electronics to defence.
Tensions eased in June after two days of discussions in London, where both sides agreed to revive the tariff truce. However, with few details disclosed, uncertainty continues to weigh on traders and investors on both sides of the Pacific.
China faces an August 12 deadline to reach a durable deal with the White House, as Trump intensifies his global tariff assault by announcing new duties on other trading partners.
Analysts anticipate Trump could pressure other countries to curb their trade with the world's second-largest economy in exchange for tariff relief.
Trump said earlier this month the U.S. would impose 40% tariffs on trans-shipments from third countries through Vietnam, a move that could hit Chinese manufacturers that ship goods or parts to the country. Vietnam became China's second largest export market in 2024.
The U.S. president has also threatened a 10% charge on imports from BRICS countries "pretty soon", which China is a founding member, potentially raising more economic risks for Beijing.
China's trade relations with the European Union are also on shaky ground. Just weeks ahead of a key summit this month, the EU accused China of flooding global markets with overcapacity, limiting access to its market, and enabling Russia's war economy.
China earlier this month offered a rare concession by sparing major cognac producers from hefty duties levied on EU brandy, but the broader dispute, especially over Chinese electric vehicles, remains unresolved.
As the end of the 90-day China-U.S. tariff truce approaches, exporters will continue to rush out shipments to capitalise on the temporary reprieve, analysts say.
Still, economists at Nomura warn that export growth is likely to slow sharply in the second half of the year, weighed down by persistently high tariffs, Trump's crackdown on shipment rerouting, and souring ties with the EU.
"Exports will likely become a growth drag this year after being a growth driver last year," Nomura said in a note.
China's June trade surplus is forecast at $109 billion, up from $103.22 billion in May.