China's Export Growth Slows Amid US Shipment Drop, Imports Plunge

China's Export Growth Slows Amid US Shipment Drop, Imports Plunge

China's export growth underperformed in May due to a sharp decline in shipments to the U.S., despite a temporary trade truce.

Key Figures:

• Exports increased by 4.8% year-on-year in U.S. dollar terms, falling short of the expected 5% rise.
• Imports experienced a significant drop of 3.4%, much worse than the anticipated 0.9% decrease, reflecting weak domestic demand.
• Chinese exports to the U.S. plummeted by 34.5%, while imports from the U.S. fell by over 18%.

This decline was partially offset by increased exports to Southeast Asia (up nearly 15%), the European Union (up 12%), and Africa (up over 33%). The slowdown in May's export growth, compared to April's 8.1% surge, underscores the impact of tariffs.

Trade Talks:

The U.S. and China had a preliminary agreement in Geneva, Switzerland, which reduced tariffs. Currently, U.S. tariffs on Chinese goods stand at 51.1%, and Chinese tariffs on American imports are at 32.6%. Chinese Vice Premier He Lifeng is scheduled to meet U.S. Treasury Secretary Scott Bessent in London to continue trade talks after recent tensions involving critical mineral exports and student visa restrictions.

Rare Earths:

China's Ministry of Commerce affirmed its commitment to reviewing rare earth export applications amid growing demand in robotics and new energy vehicle sectors.