China’s export momentum weakened significantly in August, with total outbound shipments rising just 4.4% from a year ago — the slowest pace since February — as pressure from U.S. trade policy and a high base effect from 2024 weighed on performance.
Customs data released Monday showed a steep 33% year-over-year drop in exports to the United States. Imports from the U.S. also declined by 16%, highlighting the continued deterioration in bilateral trade. Despite the fall, the U.S. remains China’s largest single-country export market, absorbing $283 billion worth of Chinese goods through August.
Economists point to several factors behind the slowdown: a fading boost from the earlier U.S.-China tariff truce, a crackdown on transshipment routes, and weakening global demand. Zichun Huang of Capital Economics noted that on a seasonally adjusted basis, exports showed little month-on-month change, indicating broader weakness beyond statistical base effects.
Imports into China grew 1.3% in August, falling short of the 3% forecast and reflecting sluggish domestic demand. Persistent economic headwinds — including a real estate slump and cautious consumer spending — continue to limit the pace of recovery.
To counter soft U.S. demand, Chinese exporters have increasingly turned to other global markets. Shipments to the European Union, Southeast Asia, and Africa jumped by 10.4%, 22.5%, and nearly 26%, respectively. Year-to-date exports to ASEAN and Africa are up 14.6% and 24.6%, respectively, offsetting some losses from the U.S. decline.
However, bilateral tensions remain high. A renewed 90-day extension of the tariff truce in August has not yielded significant breakthroughs. President Trump has threatened to impose a 200% tariff on Chinese goods if Beijing fails to meet rare earth export targets. Meanwhile, Washington is cracking down on transshipped goods, enforcing a 40% tariff on rerouted shipments, a move analysts say could hurt Chinese trade further.
On the domestic front, economists expect Beijing to introduce more fiscal stimulus in Q4. The People’s Bank of China may cut interest rates soon, with August data on retail, investment, and unemployment expected to show continued softness.
Consumer inflation remains negative, with Goldman Sachs estimating a 0.2% decline in August CPI. Producer prices also fell 2.9%, though month-on-month data may show some stabilization due to rising raw material costs.
As global and domestic pressures converge, China’s export-driven recovery faces increasing uncertainty in the months ahead.
