China’s exports have exceeded expectations in April, driven by a surge in demand from global manufacturers eager to capitalize on a temporary pause in tariffs announced by U.S. President Donald Trump. Amid an ongoing trade war between the U.S. and China, businesses on both sides are hopeful for a breakthrough in the upcoming trade talks in Switzerland. Customs data revealed that China’s outbound shipments rose by 8.1% year-on-year in April, significantly outpacing analysts’ forecasts of a 1.9% increase. However, this growth rate has decelerated compared to the 12.4% rise observed in March.
The rise in exports is partially attributed to manufacturers front-loading shipments in anticipation of tariffs, particularly after Trump imposed a 10% reciprocal tariff on April 2, exempting most countries but excluding China. Despite the optimism for tariff negotiations, China’s imports slightly fell by 0.2%, defying expectations of a more substantial 5.9% drop. This suggests that domestic demand may be more resilient than previously thought, as government measures to support the economy are increasingly effective. Analysts note that ASEAN countries are ramping up production before the July deadline for negotiations, relying heavily on Chinese exports for raw materials.
However, China’s export landscape remains precarious. Exports to Southeast Asia jumped by 20.8%, while shipments to the U.S. plummeted by 21%, resulting in a trade surplus with the U.S. that decreased from $27.6 billion in March to $20.5 billion. This is seen as a strategic win for Trump, who aims to reduce the trade deficit. Beijing is wary of the repercussions of a protracted trade war, yet it is also committed to implementing necessary domestic reforms for long-term growth.
With tariffs still looming, economists warn of potential trade data deterioration in the coming months. Nevertheless, recent monetary stimulus measures aim to bolster consumption and support exporters in response to the ongoing trade challenges.