Yet in September, China’s exports to the U.S. cratered, falling 27% from a year earlier. This decline represents the sixth consecutive month that outbound shipments to its biggest trading partner have declined. That’s a stunning reversal after a 33% growth rate plunge in August. It sounds an alarm over the deteriorating U.S.–China trade relations.
Exports to the U.S. are under severe pressure from a number of directions including President Donald Trump’s trade policies. At the same time, China has rapidly deepened its penetration in other regional markets. In September, China’s worldwide shipments surged to a six-month high. This boost was driven by an impressive 30.6% increase in overseas shipments to Southeast Asia over the same period last year. As for the rest of our hemisphere, exports were up 15% to Latin America and an astounding 56% to Africa.
In recent months, the tension between the U.S. and China has exploded. This tension increased especially after Trump threatened to slap the Chinese with a 100% tariff on Chinese imports. That crisis has resulted in both nations adopting new port charges on ships calling at their ports. These moves would endanger hopes for a possible concessionary meeting. Trump and Chinese President Xi Jinping are scheduled to meet in late October, and now that meeting might be in doubt.
Secondly, China was experiencing great difficulties with increasing exports to the U.S. September was a marked improvement for the country’s overall imports, jumping 7.4% after a mere 1.3% increase in August. This increase is an encouraging sign of a potential rebound in domestic demand. A softer macro outlook and a slump in the property market continue to cast a long shadow on household spending in China.
Recently, China imposed export controls on lithium-ion battery precursors and rare earth materials. Together with currently imposed tariffs, this latest move makes U.S. This latest move further exacerbates trade relations. Analysts suggest that while China’s exports face significant headwinds from U.S. policies, they may continue to show resilience due to low costs and limited global alternatives for many products.
“Currently, the external environment is still severe and complicated. Trade is facing increasing uncertainty and difficulties,” – Wang Jun
In addition to tariffs, China has recently extended export controls on lithium-ion batteries and rare earth materials, further complicating trade relations. Analysts suggest that while China’s exports face significant headwinds from U.S. policies, they may continue to show resilience due to low costs and limited global alternatives for many products.
“What is more worrisome is not only tariffs but export controls,” – Gary Ng
