US imports from China declined in April, aligning with the implementation of Trump's tariffs.
Tariff Battle's Dramatic Dents
Engulfed in a fierce trade war, China's exports to the United States have taken a substantial hit following Donald Trump's hefty tariffs, making it evident the ongoing conflict is leaving scars on the world's two largest economies as they strive for a truce. In April, outbound shipments to the US were a paltry $33 billion, plummeting 21% compared to the $41.8 billion exported in April 2024.
Interestingly, though, China managed to eke out overall exports growth by a robust 8.1% last month, way beyond economists' forecasts. The unexpected surge is attributed to a boost in Chinese exports towards Southeast Asia and Europe, which recorded a 21% and 8% increase, respectively.
Lv Daliang, director of the statistics department at the General Administration of Customs, shed some light on the situation, stating that various regions have joined forces to confront external shocks and support the ongoing economic recovery in China while ensuring foreign trade expansion.
This dramatic dip in exports to the US indicates the considerable damage the ongoing tariff war is inflicting on the Chinese economy. Moreover, it signifies Beijing's relentless quest for alternative export markets. Last week, official data showed that China's factory activity contracted at its fastest pace in 16 months in April, intensifying their calls for economic stimulus.
Inevitably, the burden isn't solely on China. The US economy experienced a reverse in the first quarter, marking its first contraction in three years, as businesses hoarded goods in anticipation of Trump's tariffs.
Experts expect Trump's top trade officials to meet their Chinese counterparts in Geneva, Switzerland this weekend in a bid to deescalate the trade war. The US has imposed a 145% tariff on most Chinese imports, and China has responded with a 125% tariff on America's exports. Consequently, trade between the two nations is tumbling sharply, as alerted by logistics experts.
By the way, ships arriving at American harbors from China are the first to be smacked with the punishing tariffs that America has imposed on most Chinese imports. This means that in a matter of weeks, consumers could face increased prices and shortages for certain products.
With a chill in the air, US Treasury Secretary Scott Bessent, who'll be present at the Geneva talks alongside Trade Representative Jamieson Greer, has cast doubts on the possibility of a deal, hinting only at hopes for deescalation. But Trump remains hopeful, expressing optimism about the negotiation's outcome and the chance for tariff reductions.
In the heat of the trade battle, Trump has indirectly brought up the case of jailed Hong Kong media mogul Jimmy Lai as a point of contention in the negotiations. Lai, former publisher of the Apple Daily tabloid, is now in the throes of a national security trial that could send him to prison for life. Sources claim the negotiating teams could discuss tariff reductions, duties on specific products, export controls, and Trump's decision to end de minimis exemptions on low-value imports.
Given the profound economic challenges at home, such as the perilous state of the property sector and prudent consumer attitudes, China has leaned heavily on its export sector to buoy overall growth. While the country has been trying to decrease its reliance on the US since the initial trade war sparked in 2018, America continues to serve as a crucial market. Economists at Nomura predict that the US accounted for 14.7% of China's total exports of goods last year, with that figure climbing to 20.6% when indirect exports via Hong Kong, Southeast Asia, and Mexico are calculated.
That being said, a 1.1% loss of China's GDP could be incurred if its exports to the US are halved, according to Nomura's estimates. However, the actual loss could be more significant, as effects ripple through to other sectors, notably the services sectors that support merchandise exports.
[1] worldtradelawreport.com/wp-content/uploads/2022/01/2021-WTLR-report-online.pdf[2] reuters.com/article/us-usa-china-trade-idUSKCN1SC2Z4[3] scmp.com/news/china/diplomacy-defence/article/3119700/china-prepares-massive-counterpunch-us-diplomats-warn-trade-war-about
- Despite the 21% decrease in exports to the United States, China showed stronger growth in overall exports by 8.1% last month, partially due to stronger exports towards Southeast Asia and Europe.
- The continuous tariff war between the United States and China has left scars on both economies, with China facing a notable decline in exports to the US, as signified by the $33 billion outbound shipments in April compared to $41.8 billion in 2024.
- In the general-news sphere, experts forecast that Trump's top trade officials will meet their Chinese counterparts in Geneva this weekend to discuss tariff reductions, duties on specific products, export controls, and the ending of de minimis exemptions on low-value imports.
- Should China's exports to the US be halved, it could result in a 1.1% loss of China's GDP, according to Nomura's estimates, with potential consequences reverberating through other sectors, particularly the services sectors that support merchandise exports.
