China’s export growth slowed to a six-month low in August, dragged down by weak exports to the United States.
According to data released by the General Administration of Customs of the People’s Republic of China on Monday, August saw China’s exports increase by 4.4% year-on-year to $322 billion, below the median expected growth of 5.5% and Reuters’ forecast of 5%. This marked the lowest growth rate in six months, while imports grew by 1.3%, down from the previous month’s 4.1%. Economists had predicted a 3.0% increase in imports.
The trade tensions between the US and China, coupled with sluggish domestic demand, have put immense pressure on China’s export-oriented economy. The temporary boost from the tariff ceasefire agreement between the US and China on August 11 is gradually waning, leaving Chinese policymakers in a bind.
At present, the US has imposed a 30% tariff on Chinese imports, while China has retaliated with a 10% tariff on American goods. Additionally, the US has levied a 25% punitive tariff on fentanyl imports from China. Despite high-level trade talks between China’s Vice Minister of Commerce, Li Chenggang, and Washington at the end of last month, no substantive agreements were reached.
Economists cautioned that if Trump imposes tariffs exceeding 35% on Chinese goods, Chinese exporters will struggle to cope.
Meanwhile, the number of containers shipping from China to the US continues to decline. According to Citibank data, in the 15 days leading up to September 3, Chinese exports dropped by 24.9% year-on-year, compared to a 12.4% decline in the preceding week.
While Chinese manufacturers are striving to boost exports to Asian, African, and Latin American markets to offset the impact of Trump’s tariffs, no other country in the world matches the consumption power of the US. The US used to absorb over $400 billion worth of Chinese goods annually.
In August, China’s exports to the US plummeted by 33%, marking the fifth consecutive month of double-digit declines. Meanwhile, exports to the ASEAN region surged by nearly 23%, to the EU by 10%, and to Africa by 26%.
The Trump administration has been imposing reciprocal tariffs on countries worldwide while engaging in trade negotiations. In July, warning that goods routed through China could face a 40% punitive tariff, US factories are struggling to find buyers through this avenue. An exporter described the situation as a “crazy rat race” to secure orders elsewhere.
Moreover, due to falling domestic prices and intense competition in China, many enterprises remain in a loss-making state, with industrial profits declining by nearly 2% in the year up to July.
An indicator of new export orders in China (PMI) has hit multi-month lows, indicating ominous signs for overseas demand in the near future.
（Reference: Reuters and Bloomberg）