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China’s exports to the US drop 34.5% in May

by admin June 9, 2025
June 9, 2025
China’s exports to the US drop 34.5% in May

China’s exports grew 4.8% year-on-year in May, but the headline figure masks a deeper slump in shipments to the United States, which plunged by 34.5% — the steepest fall since the early days of the pandemic in February 2020.

The latest trade data released by China’s General Administration of Customs shows how Beijing is struggling to navigate weakening demand from Western markets amid delayed effects of its recent tariff deal with Washington.

Meanwhile, rising shipments to Southeast Asia, the EU, and Africa helped prop up the overall figure, as trade routes recalibrate around geopolitical tensions.

US-China trade gap narrows as exports collapse

Chinese exports to the US fell sharply to $35.44 billion in May, while imports from the US slid 18.1% to $17.43 billion.

This pushed China’s trade surplus with the US down to $18.01 billion, a 41.55% year-on-year contraction, according to Wind Information.

Analysts point to the delayed impact of a mid-May tariff rollback, which came too late to alter May shipments significantly.

Washington’s 145% tariff hike on Chinese imports took effect in April, triggering immediate retaliation from Beijing in the form of triple-digit duties and export controls, particularly targeting critical minerals.

Shipments of rare earths, electric machinery, and consumer electronics are expected to rebound, though sentiment remains fragile amid renewed diplomatic friction.

Exports shift to Southeast Asia and Africa as Western demand dips

While exports to the US sank, China’s trade pivot towards emerging markets gained momentum.

Shipments to the ASEAN bloc rose by nearly 15% in May, those to the EU grew by 12%, and exports to Africa surged over 33%.

These trends reflect a strategic rebalancing as China seeks to diversify trade dependencies and maintain export volumes despite sanctions, tariffs, and slowing Western demand.

Total Chinese exports for May stood at $302.35 billion, and imports came in at $199.15 billion, resulting in a trade surplus of $103.2 billion — up 25% year-on-year.

However, imports unexpectedly fell by 3.4%, much worse than the 0.9% decline forecast by economists.

The drop in imports was largely driven by weak domestic demand, which has remained sluggish throughout the year, offset only in part by surging soybean imports, which hit a record 13.92 million metric tons, up 36.2% from a year earlier.

Sector trends show mixed results as rare earths fall, cars rise

Customs data also reveals diverging trends across export categories. Rare earths exports dropped 5.7% to 5,865.6 tons, coinciding with tighter state controls on critical minerals.

These restrictions form part of China’s bargaining strategy in trade negotiations with the US, particularly in high-tech and defence-related sectors.

Conversely, vehicle exports rose 22%, while ship exports were up around 5%. Exports of smartphones and home appliances fell roughly 10% and 6%, respectively.

China’s Ministry of Commerce said it would continue reviewing rare earths export applications due to growing global demand in robotics and electric vehicle supply chains.

Trade negotiations continue in London amid fresh tensions

High-level trade talks between China and the US is expected to resume in London, with Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent leading their respective delegations.

The meeting follows renewed accusations from both sides over non-compliance with the Geneva agreement signed last month, which saw both parties reduce tariff levels.

Beijing has criticised the administration for expanding export controls on semiconductor technology and tightening visa restrictions for Chinese students.

Washington, in turn, has faulted China for delays in fulfilling its commitments on rare earths exports.

The post China’s exports to the US drop 34.5% in May appeared first on Invezz

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