China’s exports growth beat expectations in June, buoyed by robust shipments to non-U.S. markets and as a temporary reprieve from U.S. tariffs helped slow the decline in goods sent to America.
Exports jumped 5.8% in June in U.S. dollar terms from a year earlier, customs data showed Monday, exceeding Reuters’ poll estimates of a 5% rise.
Imports climbed 1.1% from a year earlier. While missing economists’ expectations of a 1.3% rise, that marked the first time that imports have grown this year, reversing the trend of declining imports this year amid sluggish domestic demand.
China’s exports to the U.S. dropped for a third month, falling over 16.1% in June, but the decline eased from the prior month amid a tariff truce. Imports in June dropped 15.5%. That compares with a 34% drop in exports in May, and imports decline of 18%.
The county’s shipments to Southeast Asian nations surged 16.8% from a year ago and those to European Union countries jumped 7.6%, according to a CNBC calculation of the official trade data. Imports from these regions were little changed, rising 0.08% and 0.41%, respectively.
In the first half of this year, Chinese overall exports jumped 5.9% from a year earlier, while imports slumped 3.9%, customs data showed, with a trade surplus of $585.96 billion — nearly 35% higher from a year earlier.
Despite the upbeat trade data for the first half of the year, economists forecast the export momentum could falter due to the heightened uncertainty over U.S. tariffs.
“Tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” Zichun Huang, China economist at Capital Economics said in a note Monday.
The rebound in imports is likely due to a lower base for comparison, Huang added, while the trade truce restored some demand for U.S. goods, resulting in a smaller decline in imports from America.
Following the trade data release, China’s benchmark CSI 300 index was up 0.22%.
Ties between the world’s two biggest economies have been on the mend following two days of meeting in London last month, where both sides arrived at a framework to implement the consensus reached earlier in Switzerland. Beijing agreed to resume shipments of rare earths while Washington offered to ease some export restrictions on ethane, chip-design software and jet engine components.
In June, China’s exports of rare earths surged 60.3% to a record high of 7,742 tons, according to data on Wind Information going back to 2012, with buyers likely stockpiling materials ahead of the Aug. 12 deadline.
China’s imports of rare earths, however, fell 13.7% from a year ago.
China’s steel exports jumped over 10% to 9.7 million tons, despite widespread trade protections from the U.S., EU, Vietnam and India targeting Chinese steel overcapacity. The total steel exports in the second quarter rose to 30.7 million, a record high, according to Wind Information.
Exports of integrated circuits, cars and ships also rose 25.5%, 27.4% and 11.9%, respectively, in terms of volume. Meanwhile, China’s imports of soybean products and crude oil grew 10.4% and 7.4%, respectively.
U.S. President Donald Trump’s 145% prohibitive tariffs on Chinese goods briefly took effect in April, with Beijing retaliating with triple-digit duties and other punitive measures, such as export control on critical minerals.
The tentative trade truce struck by both sides in Switzerland on May 12 — that led them to drop a majority of tariffs for 90 days — had nearly derailed, as the U.S. accused China of slow-walking on its pledge to ease restrictions on rare-earth exports while Beijing lashed out on fresh tech export curbs and student visa revocation by Washington.
“The strong exports help to partly offset the weak domestic demand and likely keep GDP growth around the government target of 5% in Q2,” said Zhiwei Zhang, president and chief economist at Pinpoint asset management.
China is set to release its second-quarter gross domestic product growth on Tuesday, with economists polled by Reuters pegging growth at 5.1%, slower than the 5.4% expansion in the first quarter.
That said, Zhang cautioned that the growth outlook for the second half of 2025 remained unclear, as exporters’ frontloading momentum could fade out, reiterating the need for Chinese authorities to roll out fresh fiscal stimulus to cushion the economy from the impact from U.S. tariffs.
Lingjun Wang, deputy director of Chinese customs authority, said in a press conference Monday that the Geneva agreement and the London framework were “hard-won” and that both sides were accelerating to implement the agreed terms.
U.S. Secretary of State Marco Rubio said last week that he had “constructive and pragmatic” talks with Chinese Foreign Minister Wang Yi, and the odds of Trump meeting Chinese President Xi Jinping were high.
Wang also emphasized that both countries should hold up the consensus reached by their leaders with concrete policies and actions.
Meanwhile, Trump has intensified the talks with other trading partners, leveraging threats of higher tariffs to extract concessions, with an apparent target on curbing transshipments linked to China.
Trump said earlier this month that the U.S. would impose 40% tariff on transshipments from third countries through Vietnam, a route commonly used by Chinese manufacturers to sidestep tariffs and get goods shipped to the U.S.
China’s exports to Vietnam soared 23.8% last month from a year earlier, customs data showed, while imports from the Southeast Asian country dropped 13.7%.
Trump also threatened a 10% charge on imports from countries aligning with BRICS’ “anti-American” policies, potentially drawing ire for Beijing.
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Source: CNBC