U.S. Imports from China collapsed by a third
Chinatown's Troubling Export Slump Amidst US Trade Wars
A recent report by the Chinese General Administration of Customs shows an unexpected 4.8% increase in China's exports, despite the ongoing trade wars and tariffs. While this figure falls short of Reuters' experts' predictions (5%), it's still a relatively positive sign considering the circumstances. However, it's the export of goods to the US that's causing concern, as exports dropped significantly in the last spring month – a staggering 34.5% decrease compared to May 2025. This is the steepest decline since the COVID-19 pandemic, leaving many economists wondering what the future holds.
"This is the first full month where Chinese exporters have been working under reduced American tariffs," says Tiancheng Xu, a senior economist at the Economist Intelligence Unit, quoting Reuters.
As you might recall, American tariffs on Chinese goods surged to 145% in April 2025 during the height of the trade war, while Chinese tariffs reached 125%. Despite the temporary truce signed in Geneva in May, American tariffs currently sit at 51.1%, and Chinese tariffs at 32.6%.
This past week, trade negotiations between America and China resumed in London, with most experts agreeing that these talks should help reduce tensions between the world's two largest economies.
On the other hand, China's imports overall have been on a downward trend in 2025. In May, the total import volume dropped by 3.4% compared to May 2024, contrary to the experts' expectations (-0.9%). The exception to this trend is soybean imports, which rose by 36.2% to record-breaking 13.92 million tons.
Imports from the US plummeted by over 18%, and the trade surplus with America collapsed by 41.55% to $18 billion in May. However, the overall trade surplus for the spring month increased by 25% to $103.2 billion.
The growth of exports in May slowed significantly compared to April, largely due to the implementation of American tariffs on Chinese goods starting in April. As a result, exports to the US fell by more than 21%.
Tiancheng Xu reminds us that the tariffs were only lowered in mid-May, suggesting that damage had already been done.
Rare Earth Metal exports decreased by 5.7% in May, but surprisingly they rose by 23% compared to April. It's important to note that Beijing introduced export restrictions on these metals in April, and now require approval from the Ministry of Commerce of the People's Republic of China for export permits.
On a positive note, car and ship exports went up by 22% and almost 5%, respectively, while smartphone and household appliance exports fell by 10% and 6%, respectively.
What's Behind the Slump?
The ongoing trade tensions, increased tariffs, and policy unpredictability have all played a part in discouraging Chinese exports to the US. Furthermore, US importers are growing increasingly reliant on alternative markets, such as ASEAN countries, due to geopolitical tensions and high tariffs. Supply chain adjustments and cautious purchasing behaviors due to this uncertainty have also contributed to the declining export volume.
While a rebound is expected in June following the temporary trade truce, exports are expected to slow down again over the long term. Market participants remain wary, as future trade policies between the US and China could change rapidly, impacting export volumes.
- The ongoing trade tensions and increased tariffs have discouraged Chinese sports equipment manufacturers, as the export of sports goods to the US has seen a significant decline.
- Despite the improvement in weather conditions, the decreased demand for items like baseballs and tennis balls has been heavily influenced by the uncertain trade landscape between the US and China.
