Despite the trade war, Chinese exports are holding up

Summary:

China’s exports rose 5.8% in June despite the trade war, but future growth faces risks from fragile U.S. tariff agreements, rising duties, and efforts to block indirect exports via third countries.

Chinese exports exceeded expectations in June. Data released on Monday showed that Chinese exports rose 5.8% year-on-year, above the 5.0% expected and up from 4.8% in May.

Chinese imports also rebounded, rising 1.1% after contracting 3.4% in May. Economists had expected a 1.3% increase.

Nevertheless, imports remain at fairly low levels since the beginning of the year. This is due to weak demand for raw materials (agricultural and energy).

On the other hand, exports have been very strong. First, shipments were very robust in anticipation of tariffs. Then, the decline in shipments to the United States was more than offset by an increase in exports to other regions.

As a result, China's trade surplus continues to grow. In the first half of 2025, it amounted to $586 billion.

An uncertain future

While China got through the first half of the year without too much damage, the future is very uncertain. In May, the US and China agreed to a 90-day truce in Geneva. Since then, an agreement, the details of which have not been disclosed, has been reached in London. But we do not really know whether the previous deadline of August 12 still stands or whether the June agreement will prevail indefinitely.

What we can say is that this provisional tariff agreement remains fragile. The previous compromise in May was quickly undermined by a series of export controls that disrupted supply chains in several key sectors.

Beijing must now maneuver skillfully to convince Washington to ease tariffs. Analysts estimate that taxes above 35% would undermine the profitability of Chinese manufacturers. "Tariffs are likely to remain high, and Chinese manufacturers are increasingly constrained in their ability to rapidly increase their global market share by lowering prices," warns Zichun Huang, China economist at Capital Economics. She anticipates a slowdown in exports in the coming quarters, weighing on the country's growth.

Beyond direct tariffs on Chinese products, the US is trying to prevent these measures from being circumvented. Since the introduction of tariffs during Donald Trump's first term, China has been using third countries, particularly in Southeast Asia, to ultimately export its products to the US without paying tariffs.

The Trump administration now seems determined to close this loophole. The agreement reached with Vietnam in early July provides for a 20% tariff on Vietnamese products but 40% on "illegal transshipments" (goods transiting through Vietnam). However, it is still unclear how Washington will define illegal transshipment and what added value Vietnam will have to bring to imported products to avoid the 40% tax.

The fact remains that China is in Washington's sights and that US trade policy is a threat to its economy. For China, the equation is still the same: tariffs are holding back exports. Exports are the main driver of growth. The trade war therefore highlights, once again, the need to further stimulate domestic demand.

Source: marketscreener

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

Quick Access to 7x24

Quick Access to More Editor-selected Real-time News

Exclusive video for free

Live Learn project team is dedicated to create exclusive videos

Real-time Quotes

View more faster market quotes

More comprehensive macro data and economic indicators

Members have access to entire historical data, guests can only view the last 4 years

Member-only Database

Comprehensive forex, commodity, and equity market data

7x24

Real-time quotes

Economic Calendar

Economic Calendar
Events
Holiday

Policy Rates

BANKS ACT (%) PREV (%) CPI (%)

Speculative Sentiment

SYMBOL

LONG SHORT

English

العربية

繁體中文

简体中文

Bahasa Melayu

Bahasa Indonesia

ภาษาไทย

Tiếng Việt

Economic Calendar 7x24 Quotes Video Analysis Data Warehouse Pro AI Signal News User Agreement Privacy Policy About Us

Risk Disclosure

The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.

Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.

Recent Searches

Trending Searches

News

7x24

Quotes

Economic Calendar

Video

Data

Despite the trade war, Chinese exports are holding up

Source: marketscreener

Risk Disclosure