China’s exports to the United States dropped sharply by 35% in May compared to the same time last year, according to newly released customs data. The steep decline adds to growing economic pressure on the world’s second-largest economy, just as another round of trade negotiations with the U.S. was set to begin Monday in London.
Overall, China’s exports rose 4.8% in May year-over-year, slowing from an 8.1% increase seen in April. Imports, however, fell 3.4%, leaving the country with a trade surplus of $103.2 billion.
In dollar terms, China exported $28.8 billion worth of goods to the U.S. in May, down from $44 billion a year ago. Imports from the U.S. also declined to $10.8 billion. Despite this downturn, exports to other regions remained solid. Shipments to Southeast Asia and the European Union rose 14.8% and 12% respectively, with notable increases to Thailand, Vietnam, Indonesia, and Germany.
Lynne Song of ING Economics noted that China’s growing trade with other economies has cushioned the blow from tensions with the U.S., helping keep exports relatively steady despite the ongoing trade war. Some of the recent trade activity may have been the result of companies rushing to place orders before higher tariffs were enacted.
Zichun Huang of Capital Economics predicted that exports might recover modestly in June due to a 90-day suspension of many tariffs imposed by both countries. However, he cautioned that with tariffs expected to remain high and Chinese manufacturers facing limitations in expanding global market share, export growth could weaken further toward the end of the year.
The trade truce hasn’t fully eased tensions between Washington and Beijing. Disagreements continue over issues like advanced semiconductors, rare earth minerals critical to high-tech industries, and U.S. visa access for Chinese students.
The upcoming talks in London follow a phone conversation between President Donald Trump and Chinese leader Xi Jinping last week. Trump later told reporters aboard Air Force One that Xi had agreed to resume rare earth mineral and magnet exports to the U.S., which had previously slowed. However, Chinese authorities have not confirmed that claim.
Customs data on Monday showed a 21% decline in the value of China’s rare earth exports between January and May compared to the previous year, although the volume of exports rose by 2.3%.
Other sectors, including footwear, ceramics, and mobile phones, are also seeing similar patterns—slower demand leading to falling prices.
Additional economic indicators point to ongoing weakness within China’s domestic market. Consumer prices dropped 0.1% in May, signaling weak demand. Meanwhile, producer prices fell 3.3%, marking the steepest year-over-year decline in nearly two years, following a 2.7% dip in April. Much
