China’s Export Growth Slows In May, US Shipments See Sharpest Drop Since The COVID-19 Pandemic

China’s export growth fell to a three-month low in May, as tariffs imposed by the Trump administration led to a rapid decline in exports to the U.S.

Customs data released on Monday showed China’s exports rose 4.8% compared to a year earlier, missing estimates of 5%, according to a Reuters poll. According to a CNBC report, exports to the U.S. plunged 34%, the largest decline since February 2020, at the onset of the COVID-19 pandemic.

Exports increased by 12.4% and 8.1% in March and April, respectively, as businesses rushed to import goods before President Donald Trump’s reciprocal tariffs came into effect.

Imports into China fell 3.4% in May, compared to the previous year, as domestic demand remained subdued. Beijing’s imports from the U.S., its largest trading partner, also dropped 18%.

Customs data showed that rare earths shipments dropped 5.7% from a year ago to 5,865.6 tons, as the Xi Jinping-led government restricted exports of the critical elements in a move seen as a bargaining tool.

While China and the U.S. agreed to lift the steep tariffs imposed on one another on May 12, trade tensions remained elevated, with both sides accusing each other of reversing their commitments.

According to the CNBC report, “The prohibitive tariffs were only lifted in mid-May; the damage was already done,” said Tianchen Xu, a senior economist at the Economist Intelligence Unit.

U.S. and Chinese officials are set to meet in London on Monday in a fresh round of talks over a trade deal.

However, China’s trade surplus increased to $103 billion, higher than the $96.18 billion reported in April.

The decline in trade with the U.S. was offset by a rise in exports to Southeast Asian countries, as well as to Africa and Europe.

The iShares China Large-Cap ETF (FXI) has gained 21.8% this year, while the SPDR S&P 500 ETF (SPY) is up 1.7%.

Also See: United Airlines Pauses Elon Musk's Starlink In Regional Jets Over Static Glitches — Retail Traders Eye Rival Providers

For updates and corrections, email newsroom[at]stocktwits[dot]com.