China’s exports drop! Weak US demand under Trump's tariffs drag numbers; global outflows dip 1.1% in October

China’s latest trade data shows exports fell in October, following months of front-loading US-bound orders to get ahead of President Donald Trump’s tariffs, with the sharp drop in shipments to the United States. The figures highlight China’s continued reliance on American buyers even as it tries to grow other markets.Government data published on Friday show that exports to the US plunged 25% as demand weakened under Trump’s tariffs. This resulted in a 1.1% decline in the country's global exports year-on-year, the weakest reading since February.September, in contrast, had recorded an 8.3% increase. The October slowdown also reflects a drastic comparison from the same month in 2024, when export growth exceeded 12.6%, the fastest pace in more than two years. Despite the setback in shipments to the US, China has been redirecting goods to other regions, including Southeast Asia and Africa, as exports to the US have now fallen by double digits for seven consecutive months.Imports rose 1% in October compared to a year earlier, easing from a 7.4% rise in September. Economists say the modest growth in imports signals ongoing challenges at home, pointing to a drawn-out property sector slump and muted consumer spending.Efforts to reduce tensions with Washington may offer some relief going forward. During a meeting in South Korea late last month, US President Donald Trump and Chinese leader Xi Jinping reached an agreement to scale back parts of the trade dispute. The understanding includes lowering tariffs and delaying new port fees on vessels from both countries. China also paused some export controls on rare earths for one year and agreed to purchase more soybeans and agricultural products from the US, in exchange of certain sanctions easing on Chinese companies.Following the meeting, Goldman Sachs economists said they expect China’s export volumes to expand by 5%-6% annually, which would allow China to gain market share globally and support overall economic growth.“The reduction in some of these tariffs as part of the latest US-China trade ‘deal’ may provide a small boost to exports,” wrote Leah Fahy and Zichun Huang of Capital Economics. They added that the effects are unlikely to appear until later in the final quarter of the year.Wei Li, head of Multi-Asset Investments at BNP Paribas Securities (China), said a “meaningful” improvement in exports to the US would likely begin in the first quarter of next year and accelerate further in the second quarter.