Tariffs Take a Toll: China’s Exports to the US Plummet

China's exports to the United States plummeted by a staggering 33% in August, a sharp decline largely attributed to rising tariffs on goods being re-routed through third-party countries. This drop occurred as China's overall export growth slowed to its lowest level in six months.

According to Chinese customs data, imports from the US also fell by 16% year-over-year. On a broader scale, China’s total exports increased by just 4.4% in August, falling short of economist expectations and marking the slowest growth since February. This slowdown is partly due to the statistical effect of a high base from last year, when China's exports grew at their fastest pace in nearly a year and a half.

Sustained Pressure and Strategic Shift

Economists noted that the temporary support from the US-China trade truce has faded, leading to the re-imposition of tariffs on transshipped goods. This situation is expected to put increasing pressure on Chinese exports in the near term.

In response, China is increasingly turning to alternative markets to offset its losses in the American market. Data shows that Beijing is relying more on Southeast Asia, EU countries, Africa, and Latin America. China's exports to these regions saw significant increases in August, with a rise of 10.4% to the EU, 22.5% to ASEAN, and 26% to Africa.

Chui Zhang, chief economist at Pinpoint Asset Management, stated that this "going global" initiative has helped Chinese exports remain resilient this year as exporters strive to increase their market share in other countries amid weak domestic demand in China.

A Look at the Overall Figures

From the beginning of the year through August, China's exports to the US fell by 15.5%, while imports decreased by 11%. In contrast, exports to alternative markets rose during the same period by varying percentages:

• European Union: 7.7%

• ASEAN: 14.6%

• Africa: 24.6%

• Latin America: 6%