China's exports to US plunge 34%, worst drop since 2020
What's the story
China's exports have seen a major slowdown, with a 34.4% decline in shipments to the US, the largest drop since February 2020.
The fall comes despite a trade truce reached on May 12, which temporarily eased duties on Chinese imports into the US that were facing rates as high as 145%.
The overall export growth is still expected to support China's economy amid weak domestic demand.
Trade figures
China's overall exports grew by 4.8% in May
In May, China's overall exports grew by 4.8% year-on-year (YoY) to $316 billion, slower than the 6% median growth forecast.
Meanwhile, imports fell by 3.4%, marking the third consecutive month of decline. This left a trade surplus of $103 billion for the country.
Despite the sharp fall in US-bound shipments, exports to other countries showed strength, with some regions experiencing growth during this period.
Trade tensions
US tariffs could drastically reduce demand for Chinese goods
The US has threatened to impose higher tariffs on several countries starting early July, with China facing the brunt from August.
These measures could drastically reduce demand for Chinese goods directly headed for the US and those used as raw materials in other countries.
Even if a deal is struck between China and other nations with the Trump administration, demand from the US and beyond may still weaken as companies slow down their frantic purchasing aimed at beating these tariffs.
Economic outlook
China's record trade surplus expected to support companies
Despite the challenges, China's record trade surplus of nearly half a trillion dollars so far in 2025 is expected to support companies facing weak domestic demand.
However, in the latter half of this year, China could see a growth drag if global trade risks materialize.
The upcoming US tariffs could significantly impact Chinese exports and imports, further complicating the country's trade dynamics amid ongoing global economic uncertainties.