China’s exports reached a record so far this year, as higher US tariffs and the threat of more to come drove frontloading of shipments.
The value of sales abroad rose 2.3 percent in the first two months of the year to US$540 billion, according to a statement from the Chinese General Administration of Customs yesterday. Imports unexpectedly fell 8.4 percent, leaving a record trade surplus of nearly $171 billion.
The median forecasts of economists surveyed by Bloomberg were for exports to rise 5.9 percent and imports to gain 1 percent.
Photo: AFP
The figures offered a glimpse into how the world’s largest trading nation has fared since US President Donald Trump started raising tariffs on Chinese goods. The US imposed a 10 percent levy on almost all imports from China on Feb. 4, then hiked that to 20 percent earlier this week.
“The damage of higher US tariffs on China’s exports will likely show up in next month,” said Zhang Zhiwei (張智威), president and chief economist at Pinpoint Asset Management. “While the tech sector in China is booming, domestic demand is still weak as the property sector downturn has not ended.”
The drop in imports reflects sluggish demand at home and shows how the health of the domestic economy is affecting other nations. Chinese purchases from overseas hit the lowest since 2020.
This week, the government in Beijing announced it would expand the budget deficit as it tries to hit a growth target of 5 percent for this year.
“China’s weaker-than-expected exports in the first two months of 2025 are a bad sign — the impacts of the US tariff hike in February and softening external demand appear to have outweighed front-loading by US importers that we expected to buoy shipments, at least temporarily. The sharp, and surprise, drop in imports shows the economy is weak,” Bloomberg economist Eric Zhu said.
China is highly vulnerable to the risk of a global trade war. Although the US directly absorbs only about 15 percent of Chinese exports, more goods are shipped there through Vietnam, Mexico and other countries.
Companies shipped a record US$87 billion of goods to the 10 countries in the ASEAN bloc in the first two months, with exports to Vietnam the highest on record. Purchases by firms in the EU were also higher than for the same period last year.
Should the US continue to raise tariffs, it could drastically slash an important driver of growth that contributed to almost a third of China’s economic expansion last year. Even at their current levels, Trump’s higher charges might cut into the speed at which China’s exports grow for the rest of the year.
The latest pickup in Chinese shipments to the US shows how the threat of tariffs is pushing companies in both nations to attempt to get goods into the US before the Trump administration increases their costs even further.
Exports to the US rose to almost US$76 billion, the largest in three years for the first two months of the year. Still, it was below the haul in the same period in 2022, when the pandemic drove a massive expansion in bilateral trade.
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