The freight ship loaded and unloaded foreign trade vessels at Qingdao Port, Shandong Province, China on June 9, 2025.
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Exports to the US to China plummeted 33% in August, but overall growth was weakest in six months, partially down as President Donald Trump’s crackdown on transport and the impact of Front Road exports faded.
Customs data shows that imports from the US also fell 16% from a year ago.
China’s overall exports rose 4.4% in August on US dollar terms compared to the previous year. Customs data was shown on Monday, showing its lowest growth since February, but the estimates of economists declared by Reuters increased by 5.0%.
That growth has slowed since the last two months, in part reflecting the statistical effect of last year, when China’s exports grew at the fastest pace in nearly a year and a half.
“Exports are likely to be under pressure in the short term as the US-China trade ceasefire is a temporary boost and the US will raise tariffs on re-routed cargo through other countries,” said Zichun Huang, Chinese economist at Capital Economics.
Huang noted that exports have been changed little each seasonally adjusted month, and that the slowdown in headline numbers mainly reflects last year’s highest base.
Imports rose 1.3% last month from a year ago, with Reuters estimates missing out on 3% growth. Imports have risen for the third consecutive month since returning to growth in June, but the real estate recession continues and the rising anxiety about work remains stable.
China is increasingly dependent on alternative markets in Southeast Asia and the European Union, particularly in Africa and Latin America, as US President Donald Trump’s trade policy keeps US cargo under pressure.
Going abroad
“Chinese exporters are seeking higher market share in other countries due to weak domestic demand in China. This ‘go abroad’ initiative may have contributed to China’s export resilience so far this year.”
The country’s shipments to the European Union bloc, the Association of Southeast Asian Countries and the Association of African States, surged by 10.4%, 22.5% and almost 26% in August, respectively.
From this year until August, exports to the US to China fell 15.5% from the same period last year, while imports fell 11%. During that same period, exports to the EU, ASEAN, Africa and Latin America surged to 7.7%, 14.6%, 24.6% and almost 6%, respectively.
Nevertheless, as of August, there are no countries this year that China’s biggest trading partners are not approaching the country that maintains China’s biggest trading partner on a single country basis. Exports to the EU bloc were $541 billion over the same period.
According to the Peterson Institute, on August 11, Beijing and Washington agreed to extend the tariff ceasefire for another 90 days, closing the Chinese duties on Chinese imports and 30% of US goods.
However, bilateral talks appear to be struggling to reach a breakthrough, and a visit to Washington by Chinese trade negotiator Li Chenggang in late August brought little progress.
If Beijing fails to support its August promise to increase rare earth magnet exports to US rare earth exports, Trump is threatening a 200% tariff on Chinese goods, customs data shows.
Chinese exporters rely on routes of cargo to third countries to avoid US tariffs. This is a tactic facing a tighter testing of the US scrutiny on so-called transships, and analysts warn that China could consider exports in the coming months.
In July, the US announced a 40% tariff on shipments that it deemed to be introduced by Washington.
Slowing domestic demand
Economists are seeing whether Beijing will announce additional financial support in the fourth quarter to weaken domestic demand and cushions. However, policymakers appeared to prioritize suppressing industrial overcapacity over more allocations to the flagship “Cash-for-Clunker” program aimed at increasing demand.
Many local governments across the country have suspended consumer trade-in programs that subsidize spending on cars, home appliances and smartphones due to a rapid depletion of allocated funds.
Deflationary pressures could last domestically. Goldman Sachs remains “deeply negative” inflation rates at wholesale prices, with producer price indexes falling 2.9% year-on-year in August.
Wall Street Bank is forecasting that monthly reading could turn positive, aided by Beijing’s “anti-volution” policy aimed at reducing excessive price reductions and recent rise in upstream raw material prices.
Headline CPI inflation remains “moderately negative,” falling 0.2% last month, Goldman said.
Neo Wang, the leader of Evercore ISI Chinese strategist, hopes that the People’s Bank of China will lower its policy rate to 10 basis next week to 20 basis points, where a massive amount of economic data from China will be available to view.
Beijing is set to release next Monday figures on August retail sales, industrial output, urban investment, homepieces and urban unemployment rates.
“With these numbers, which are expected to show signs of restrained growth again, Beijing can use rate cuts to counteract pessimism and ease the hope of bad news and cause good news,” Wang said.
– CNBC’s Evelyn Cheng contributed to this report.
