China’s Exports to the US Drop Sharply in May

Recent reports indicate that China’s exports to the United States experienced a significant decline in May. This downturn is attributed to a temporary pause in trade between the world’s two largest economies, which has led to “too slow” shipping rates and helped avoid major disruptions at ports.

Government data released today shows that shipments to the US dropped by 35% in May compared to the same month in 2024. This marks the steepest decline since February 2020, when the COVID-19 pandemic first caused widespread supply chain issues.

Interestingly, this decline follows President Trump’s decision to reduce tariffs on Chinese goods—from 145% to 30%—within a three-month period.

Tianchen Xu, a senior economist at the Economist Intelligence Unit, weighed in on the situation.

On a more positive note, China has reported a rise in exports to other markets. For instance, freight to Southeast Asia and the European Union increased by 15% and 12%, respectively. Moreover, exports to African nations surged by more than 33%.

In fact, there had been a similar trend in April when China’s exports to the US fell by 21%.

Robin Brooks, a senior global economy fellow at the Brookings Institute, noted:

Brooks explained that many exporters appear to be rerouting their goods through third countries to circumvent Trump’s high tariffs, sending products to nations with lower tariffs before finally shipping them to the US.

In the first quarter of 2025, Beijing reported a 5.4% increase in its gross domestic product. However, the country is still grappling with persistent deflation and cautious consumer spending.

In another concerning sign, imports dropped by 3.4% compared to last year—a significant decrease from the previous month’s relatively modest 0.2% decline, which was worse than analysts anticipated.

Additionally, imports from the US fell by over 18%, causing China’s trade surplus to shrink by 41.6% to around $18 billion.

Looking ahead, the US and China are set to meet for trade negotiations in London. Recent discussions have revealed tensions, with both parties accusing each other of not adhering to the terms of a temporary agreement made in May.

While the Trump administration has blamed China for halting shipments of rare earth materials, China has criticized the US for canceling its export restrictions on AI chips and student visas for Chinese nationals.