China’s trade data for April highlighted contrasting trends, with exports to the United States plunging while trade with other regions saw significant growth. This development suggests that the strategic reshuffle in global supply chains, prompted by President Donald Trump’s tariff policies, is well underway.
In April, China’s total exports increased by 8.1% compared to the previous year, surpassing the anticipated 2% rise by economists. Despite this growth, it marked a deceleration from the 12.4% expansion recorded in March. Simultaneously, imports slightly dipped by 0.2% year-on-year.
Exports to the United States plummeted 21% as U.S.-imposed tariffs on Chinese goods soared up to 145%. At the same time, China maintained its import tariffs on U.S. products at 125%, casting doubt and uncertainty on the commerce between the world’s two largest economies. China’s imports from the United States also saw a notable drop of over 13%, while the trade surplus between the two countries narrowed to approximately $20.5 billion, a decline from around $27.2 billion the previous year.
Over the first four months of the year, China’s exports to the United States diminished by 2.5%, with U.S. imports decreasing by 4.7%. Anticipations for a resolution could be on the horizon this weekend as Treasury Secretary Scott Bessent and other high-ranking trade officials are scheduled to convene with Chinese counterparts in Geneva. However, significant hurdles remain due to conflicting strategic priorities that may hinder any swift breakthroughs.
Some tariffs might be relaxed, but experts like Zichun Huang from Capital Economics caution that a complete reversal is improbable. This indicates a continued decline in China’s U.S. export figures, which may not be fully compensated by rising trade with other nations. Huang projects negative export growth later in the year.
Regardless of the diplomatic outcomes, China’s export surge to non-U.S. markets underscores a long-standing restructuring trend that gained traction due to increased tariffs. The need for diversified manufacturing bases intensified, particularly after the COVID-19 pandemic underscored the risk of heavy dependence on China for manufacturing needs.
Under Trump’s tenure, tariffs were raised on Chinese exports, and many remained in effect through President Joe Biden’s administration. Although the United States still represents about 10% of China’s exports, the European Union and Southeast Asian countries have grown as more significant trade partners, highlighting the shifting landscape.
China’s trade with the Regional Comprehensive Economic Partnership bloc, which excludes the U.S., also surpasses bilateral U.S. trade. Moreover, exports to participants in the “Belt and Road Initiative” have been expanding robustly.
From January to April, exports to the Association of Southeast Asian Nations climbed by 11.5%, parallel to a similar rise in shipments to Latin America. India witnessed a nearly 16% growth in imports from China, while exports to Africa soared by 15%.
The most marked increases were observed in Asian countries, spurred by a strategic pivot by manufacturers to establish more diversified supply chains. Export growth to Vietnam and Thailand exemplified this, rising by 18% and 20%, respectively.
Domestically, initial indicators point to a decrease in trade and shipping activities within China. In response, Chinese authorities have recently introduced a series of measures aimed at mitigating the trade conflict’s economic impact, especially as the country strives to recover from the pandemic and a prolonged slump in its real estate sector.