BANGKOK (AP) — In a welcome bump for China’s economy, exports shot up by 7.2% in July year-over-year, while imports experienced their most substantial gain in a year. This surge can be attributed to businesses jumping on an opportunity made possible by a break in President Donald Trump’strade conflicts with Beijing.
However, it’s essential to note that analysts suggest this uptick may look better than it is because it’s playing against a low benchmark from July 2024.
Interestingly, exports directed towards the U.S. plummeted by nearly 22%, and imports from the states dropped almost 19%. On the flip side, trade with Africa and Southeast Asia shone, showing double-digit growth as Chinese enterprises shifted focus to these emerging markets.
As China navigates its way through tariffs, the ones linked to its goods are now being evaluated apart from the recently increased tariffs that were introduced for various U.S. trading partners just last Thursday.
July marked a pivotal point with China’s global trade surplus climbing to an impressive $683.5 billion, a hefty 30% increase from the same time last year. Specifically, July’s surplus was recorded at $98.2 billion, highlighting a substantial gap as exports to the U.S. were notably greater than imports from American goods, pegged at $23.7 billion.
Imports into the U.S. from China are generally facing tariffs of no less than 30%, throwing a wrench in the trading wheel with some items bearing even heftier taxes. Trump previously imposed stunning rates that could hit as high as 245%, a move that was met with retaliation from Beijing. For now, both parties have consented to pause these hikes while they seek common ground in trade discussions—a truce that’s seemingly set to last only until August 12, after recent talks held in Sweden.
The Trump administration isn’t stopping at China alone; they have also tightened tax regulations on imports from other nations where they suspect goods might be rerouted. A notable example is Vietnam, where duties have escalated to 20%, leaping to 40% for transshipped products.
Zichun Huang from Capital Economics shared that “the brief spike in demand spurred by the U.S.-China trade pause is already beginning to wane, and the rise in tariffs on rerouted shipments indicates that exports might remain challenged short-term.”
Economists had predicted that China’s dollar-based exports would only tick up by less than 6% for July, aligning closely with June’s 5.8% figure.
Still, there’s good news: expanded trading with other global players is helping soften the blow from Trump’s trade policies. Imports excavated a 4.1% rise from last year, marking the highest leap since July 2024. This climb has been driven by increased shipments of crucial goods like crude oil, copper, and soybeans.
On another note, China has started to loosen regulations around rare earth exports—essential minerals for a plethora of products—which have been emphasized as a vital topic in trade discussions with the U.S.
Although July saw a dip of 17.6% in rare earth exports compared to a drastic almost 50% drop the previous month, the overall exports through January to July reduced by 24.2% in dollar terms, even though by volume they increased over 13%.
A variety of sectors, including vehicles, fertilizers, ships, and auto parts, witnessed robust export growth, giving a possibly brighter long-term outlook amidst the fluctuating tariffs.
