The JISU FORTUNE ship carries over 5,000 vehicles at Taicang Port and makes its maiden voyage to European countries such as the Netherlands and Belgium in Suzhou City, Jiangsu Province, China, on May 22, 2025.
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China’s exports growth missed expectations in May, dragged down by a sharp decline in shipments to the U.S., with analysts saying effects of a Beijing-Washington trade truce will be visible in June data.
Chinese exports to the U.S. plunged 34.5% from a year ago, marking the sharpest drop since February 2020, according to Wind Information, when the Covid-19 pandemic disrupted trade. Imports from the U.S. dropped over 18%, as the country’s trade surplus with the U.S. shrank by 41.55% year-on-year to $18 billion.
Overall exports rose 4.8% last month in U.S. dollar terms from a year earlier, customs data showed Monday, shy of Reuters’ poll estimates of a 5% jump.
Imports plunged 3.4% in May from a year earlier, a drastic drop compared to economists’ expectations of a 0.9% fall. Imports had been declining this year, largely owed to sluggish domestic demand.
That was largely offset by its shipment to the Southeast Asian bloc, which jumped nearly 15% from a year, and those to European Union countries and Africa, which rose 12% and over 33%, respectively.
China’s total trade surplus increased 25% from a year earlier to $103.2 billion in May.
Still, exports growth in May slowed significantly from an 8.1% surge in April when a jump in shipment to Southeast Asian countries offset a sharp drop in outbound goods to the U.S. Chinese shipment to the U.S. plunged over 21% in April, as prohibitive tariffs kicked in.
“The prohibitive tariffs were only lifted in mid-May, the damage was already done,” said Tianchen Xu, senior economist at Economist Intelligence Unit.
China’s exports of rare earths dropped 5.7% from a year ago to 5,865.6 tons, customs data showed, as Beijing tightened export controls of the critical minerals to gain leverage during its trade negotiation with the Trump administration.
Volumes of cars and ship exports jumped by 22% and around 5%, respectively, from a year ago, while exports of smartphones and home appliances fell around 10% and 6%, respectively.
China’s imports of soybeans surged 36.2% year on year to a record high of 13.92 million metric tons, according to Wind Information.
High-stakes trade talks
Xu expects U.S.-bound exports to see some recovery in June. “It will be the first full month for Chinese exporters to enjoy reduced U.S. tariffs,” Xu said, adding that rare earths and electric machinery shipments would rebound following Beijing’s move to ease supervision on these exports.
U.S. President Donald Trump’s prohibitive 145% tariffs on Chinese goods took effect in April, prompting Beijing to retaliate with triple-digit duties and other restrictive measures, such as export controls on critical minerals.
U.S. and China struck a preliminary deal in Geneva, Switzerland, last month that led both sides to drop a majority of tariffs. Washington’s levies on Chinese goods now stand at 51.1% while Beijing’s duties on American imports are at 32.6%, according to think tank Peterson Institute for International Economics.
Zichun Huang, China economist at Capital Economics, pointed to early signs of U.S. demand for Chinese goods picking up following the Geneva truce.
While noting that it took time for the recovering demand to feed through to actual shipments, Huang cautioned that the existing tariffs are unlikely to be reduced further, if not hiked again, and will lead to slower export growth by year-end.
Chinese Vice Premier and lead trade representative He Lifeng is expected to meet with the U.S. trade negotiation team led by Treasury Secretary Scott Bessent in London later in the day for renewed trade talks.
The second-round of meetings come after tensions flared up again between the two sides, as they accused each other of violating the Geneva trade agreement.
Washington had blamed Beijing for slow-walking its pledge to approve the export of additional critical minerals to the U.S., while China criticized the U.S. decision to impose new restrictions on Chinese student visas and additional export restrictions on chips.
China’s Ministry of Commerce said on Saturday that it would continue to review and approve applications for export of rare earths, citing growing demand for the minerals in robotics and new energy vehicle sectors.
— CNBC’s Evelyn Cheng contributed to this story.
