Chinese exports to the United States reportedly recorded their sharpest decline in five years in May, reflecting deepening economic strain on both sides as a renewed tariff standoff overshadows global trade dynamics.
Customs data released Monday showed exports to the U.S. fell by roughly 35 percent from a year earlier—the most dramatic drop since February 2020, early in the COVID-19 pandemic.
This downturn came even as Beijing and Washington agreed to a temporary truce earlier this spring, during which a significant portion of tariffs was suspended for a 90-day window.
While shipments to other markets—including Europe and Southeast Asia—continued to grow, China’s overall export growth decelerated to just 4.8 percent in May, down from an 8.1 percent increase in April.
Economists suggest that the May figures reflect two powerful forces. Before the truce took effect, manufacturers accelerated U.S.-bound shipping to buffer against rising tariffs. But sustained levies, which remain well above pre-pandemic levels, have since slowed those flows sharply.
“This is the steepest drop in U.S. exports since the pandemic lockdowns,” said a Hong Kong-based trade analyst. “Even with a brief pause in duties, the damage was already done.”
The decline poses serious challenges for China’s manufacturers, particularly smaller firms that lack the flexibility to redirect orders abroad.
Though shipments to emerging markets such as Vietnam, Thailand, and Germany have helped buffer the blow, the United States remains China’s single largest export destination—and its collapse reverberates across supply chains from smartphones to automotive parts.
China’s export slump also compounds a broader crisis at home. May saw producer prices drop by 3.3 percent—the sharpest decline in two years—while consumer inflation turned negative for a fourth consecutive month, signaling weakening domestic demand alongside export volatility.
The sharp contraction in outbound trade is reawakening concerns about Beijing’s ability to shield its economy from global pressures.
Imports slid by 3.4 percent in May, worsening the contraction seen in April, and underscored how declining foreign demand is spreading to domestic markets.
The steep U.S. export decline comes as both countries engaged in high-level trade talks in London this week. While officials from Beijing and Washington are working to rebuild momentum toward a longer-term agreement—focusing on rare-earth minerals and chip export restrictions—uncertainties persist.
Even with President Trump expressing cautious optimism in phone calls with President Xi Jinping, most experts warn that a comprehensive détente remains fragile.
For now, factories from Shenzhen to Shanghai are caught in the crossfire. The export slump has prompted Beijing to roll out targeted stimulus measures, including cheaper loans and interest rate cuts, but analysts warn that these may offer only temporary relief if global trade remains unsettled.
As global markets recalibrate, China is increasingly relying on shipments to non-U.S. markets to sustain growth. But with U.S.-China trade relations in limbo, the economic fallout may deepen—testing both countries’ resilience and reshaping the future of global commerce.
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