China’s exports to the United States experienced a significant decline in April, falling by 21% in dollar terms as the impact of tariffs imposed during the Trump administration continues to be felt. Tariffs recently hit 14% to 25% on nearly all exports from China. Due to this dramatic increase, the United States placed unprecedented pressure on trade relations between the two nations. At the same time, China’s trade with every other country has skyrocketed, as the country reoriented its export base in a new direction.
In April, China’s total exports went through the roof, climbing by 8.1% over last year. Exports to the US plummeted, showing a contrast that couldn’t be more clear. China’s imports from the US plummeted by more than 13% from a year earlier. This drop marks the beginning of a negative trend in bilateral trade. In April, China watched its trade surplus with the U.S. fall to just under $20.5 billion. This was a large drop from about $27.2 billion the year before.
Shifts in Trade Patterns
Despite the crash in trade with the US, look at how well China’s trade with every other economy has rebounded. Most significantly, shipments to India increased almost 16% in value, representing a thriving new trade partnership. Exports to Africa were up by an amazing 15%! At the same time, shipments to Thailand and Vietnam were up by 20% and 18%, respectively. China is working to diversify its trade routes to deepen economic relationships with other markets. This decision comes at a sensitive time in the country’s bilateral relationship with the US.
China’s exports to the 10-nation Association of Southeast Asian Nations (ASEAN) increased by 11.5% on-year. Exports to Latin America in particular skyrocketed with an increase of 11.5%. That is emblematic of the explosive demand for Chinese goods outside of its traditional markets.
“This means China’s exports to the US are set for further declines over the coming months, not all of which will be offset by increased trade with other countries. We still expect export growth to turn negative later this year,” – Zichun Huang of Capital Economics.
Economic Implications
Even worse, exports to the US are already falling. This decline in exports, along with an even larger decline in imports, points to deeper economic turmoil for China. In addition to decreasing the value of US-China trade, the tariffs may eventually slow China’s total economic growth. The US is China’s largest single-country market, accounting for about one-tenth of total Chinese exports in April. This reality may pose significant burdens on China’s rise moving forward.
China’s total export numbers might not tell the full story here—they paint a picture of incredible resilience. Despite a challenging US market, last month total exports skyrocketed by 8.1%! Specialists warn that unless there is significant expansion in alternative markets, the prospects for Chinese exports in the medium to long term are still unclear.
Future Outlook
Third, analysts expect to see a further fall in China’s exports to the US over the next few months. After all, with the existing tariffs still in place, new trade agreements are being negotiated around the world. Meanwhile, China remains keen to expand its own economic connections with countries across Asia, Africa and Latin America. Simultaneously, it will place a focus on reducing the impacts of lost demand from its biggest trading partner.
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