China’s Exports to the U.S. Drop Over 30% in August

China’s exports to the United States fell by 33% in August compared to the same period last year, continuing a declining trend seen in recent months.

Overall Trade Performance

According to data released by China’s Customs on September 8, the country’s total exports grew 4.4% year-on-year in August. However, this figure was below analysts’ expectations and marked the slowest growth since February.

Imports rose 1.3%, also missing forecasts. Although imports have now grown for three consecutive months, the pace remains weak as domestic demand struggles amid a prolonged property crisis and rising unemployment concerns.

Sharp Decline in U.S. Trade

• Exports to the U.S.: Down 33% year-on-year.

• Imports from the U.S.: Down 16%.

• Despite the decline, the U.S. remains China’s largest trading partner, purchasing goods worth $283 billion in the first eight months of the year.

Pressures on China’s Trade

China’s trade is under strain as Washington tightens controls on re-exports and early stockpiling to avoid tariffs slows down.

Zichun Huang, an economist at Capital Economics, warned that Chinese exports “may continue to face short-term pressure” due to higher U.S. tariffs and fading momentum from previous trade agreements.

Diversifying Export Markets

Facing repeated tariff hikes from the U.S., China has been seeking alternative markets:

• Southeast Asia: Exports up 22.5% year-on-year.

• European Union (EU): Up 10%.

• Africa: Up 26%.

On August 11, Beijing and Washington agreed to extend tariff relief measures for another 90 days, though bilateral negotiations have yet to make meaningful progress.

Rare Earth Trade and Policy Uncertainty

Former U.S. President Donald Trump previously threatened to impose 200% tariffs on Chinese goods if Beijing failed to boost exports of rare earth magnets to the U.S.

Latest data show that in August, China exported nearly 5,800 tons of rare earth products to the U.S., up 22% from a year earlier.

Domestic Economic Challenges

Economists are closely watching whether Beijing will launch additional fiscal stimulus in Q4 to boost domestic demand and offset weaker exports. However, the government appears more focused on controlling overcapacity rather than expanding consumer stimulus programs like the “old-for-new” trade-in scheme, which many local governments have already suspended due to budget shortfalls.

China also faces persistent deflationary pressure. Goldman Sachs forecasts:

• Producer Price Index (PPI): Down 2.9% in August year-on-year.

• Consumer Price Index (CPI): Down 0.2%.

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👉 Summary: China’s exports to the U.S. are shrinking sharply, while the country seeks to diversify trade partners. However, weak domestic demand and ongoing deflationary pressures remain significant challenges for Beijing.

source: Reuter, CNBC