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China's exports beat expectations after trade truce with US

China's exports beat expectations after trade truce with US

Mint14-07-2025
BEIJING—China's exports grew at a faster clip in June, topping market expectations as trade tensions with the U.S. eased following a round of bilateral talks.
Outbound shipments rose 5.8% in June from a year earlier, China's General Administration of Customs said Monday. The figure was better than many economists had predicted and represented an improvement from the 4.8% year-over-year increase in May.
Shipments to the U.S., however, fell by 16.1% in June compared with a year earlier, as hefty tariffs and uncertainty around the global tariff environment more generally stifled trade between the world's two largest economies.
Washington and Beijing reached a truce last month in their continuing trade dispute, agreeing to roll back most of their tariffs on one another. During the meeting in London, U.S. and Chinese officials outlined a framework that involves China expediting shipments of rare-earth minerals and other critical inputs to the U.S., and Washington lifting some restrictions on access to advanced American technologies.
The results of that detente could be seen in last month's Chinese exports to the U.S. While the figure remained in negative territory, the 16.1% decline was a marked improvement from a tumble of 34.5% in May and a 21% fall in April.
Economists warned against interpreting the decline as a return to normalcy. They said any improvement was likely to be temporary and underscored how much President Trump's return to office has upended the commercial relationship between the countries.
'Some of this recovery probably reflects efforts by U.S. importers to stockpile Chinese goods due to fears of renewed tariff escalation between the two countries," Zichun Huang, an economist at Capital Economics, wrote in a note to clients after Monday's data release. 'It is unlikely that exports to the U.S. will hold up this well for long."
Plenty of question marks remain over U.S.-China trade ties, even after the recent shift in tone. The truce agreed in London set a 90-day grace period for the tariff rollback, implying that the two sides have until Aug. 12 to reach a permanent deal.
Last week, the Trump administration sent letters to several countries outlining higher tariff rates that are due to kick in on Aug. 1. While that pushes back a prior July deadline by three weeks, it also affirmed punitive rates on some economies. Trump said he would slap a 50% tariff on Brazil and 35% duties on some goods from Canada. He also announced a 50% levy on copper and floated a tariff of up to 200% on pharmaceuticals.
The letters mentioned that even higher tariffs would be imposed on transshipped goods bound for the U.S., a measure widely seen as targeting Chinese-origin exports that travel through other countries on their way to America.
Chinese shipments to the U.S. in the first half of the year fell 10.9% from the same period in 2024, while China's exports to all countries rose 5.9% over that same stretch, in line with the 5.8% year-over-year increase that China reported for the full year of 2024.
While China's overall export picture remained largely unchanged after Trump's return this year, Chinese exports to the U.S. have fallen substantially, only to be made up elsewhere.
Suspicions in Washington that many goods destined for the U.S. have been rerouted through Southeast Asia prompted the Trump administration to strike a deal with Vietnam. That deal slaps a 40% tariff on goods transshipped through Vietnam to the U.S. in an attempt to close a backdoor for goods originating in China.
According to Chinese customs data released Monday, exports to the Association of Southeast Asian Nations—the grouping China counts as its largest trading partner—rose 13.0% in the first six months from a year earlier. Exports to the European Union, whose 27 nations collectively count as China's second-largest trading partner, rose 6.6% over that same time frame.
Buoyed by strong exports and Beijing's stimulus measures, China's economy has remained on a generally firm footing this year. China said its gross domestic product expanded 5.4% year-over-year in the first quarter of 2025 as companies accelerated shipments amid expectations of higher tariffs.
Economists surveyed by The Wall Street Journal expected the economy to have grown 5.2% in the second quarter, with many anticipating a moderation in growth in the second half of the year. The National Bureau of Statistics is scheduled to release GDP figures on Tuesday.
Amid lingering uncertainty in its export sector, Beijing has sought to boost domestic demand by cutting interest rates, injecting liquidity into the financial system and maintaining a 'cash-for-clunkers"-style trade-in program to encourage consumer spending.
Monday's import data showed tentative signs of recovery in domestic demand. Imports rose 1.1% in June from a year earlier, the customs bureau said, up from May's 3.4% year-over-year fall and the 0.5% decline expected by surveyed economists.
That brought China's trade surplus to $114.78 billion in June, up from the $103.22 billion surplus in the previous month and the $111.3 billion figure expected by economists.
The first month of increased imports for this year can largely be chalked up to a statistical quirk, with a lower base for comparison in June 2024, said Huang of Capital Economics.
Grace Zhu contributed to this article.
Write to Jonathan Cheng at Jonathan.Cheng@wsj.com
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