China’s Exports to the US Decline
China’s exports to the United States fell in April after Donald Trump’s three-digit tariffs came into force, in a further sign of the damage that the trade war is causing to the two largest economies in the world.
Impact of Tariffs on Chinese Exports
Outgoing programs in the US were $33 billion, according to Customs data published on Friday, last month. It was a 21% decline compared to $41.8 billion recorded in April 2024. However, China’s total exports rose by 8.1% in US dollars last month, due to an increase in Chinese exports to countries in Southeast Asia and Europe, which were 21% or 8% higher.
Efforts to Diversify Markets
The commercial figures indicate the considerable tribute that the ongoing tariff war is already taking on the Chinese economy and the efforts of Beijing to find markets beyond the United States for its exports. Last week, official data showed that China’s factory activity in April was at its fastest pace in 16 months, which improved the efforts of Beijing to expand new economic incentives.
Global Consequences
But the effects are not limited to China. In the United States, the economy was reversed in the first quarter, its first contraction in three years, as companies were expecting Trump’s “liberation day” tariffs started in April. The strong figures illustrate what is at stake this weekend when Trump’s top trading officer meets her Chinese colleagues in Geneva, Switzerland, to discuss a possible de-escalation of the trade war.
Trade War Negotiations
Most Chinese imports have been set by the United States at least 145% tariff, and China reacted to most US imports with a tariff of 125%. As a result, the trade between the two sides drops strongly according to logistics experts. The US Finance Minister has poured cold water about the prospects of a deal and only said that he is hoping for a "de-escalation". Trump appeared more sanguine, saying that he would reduce tariffs for China if the talks were going well this weekend.
Economic Challenges
In view of a number of deep-seated economic challenges at home, including a crisis in the real estate sector and a reluctance of consumers to rely on consumers, China has strongly depended on its export industry to increase overall growth. Although Beijing has been working with Trump since 2018 to reduce its commercial trust in the United States, America remains a monumental market.
Dependence on US Market
Investment Bank Nomura economists wrote in a research note last week that the United States made up 14.7% of China’s total exports last year. The number increases to 20.6% if shipping via Hong Kong, Southeast Asia, and Mexico are taken into account in the factor of the programs. Around 2.2% of the gross domestic product of China are directly affected, so China can lose 1.1% of its GDP if its exports are halved to the USA.
