China's Exports Growth Slows, Deflation Deepens as US Tariffs Bite

Exports to US Plunge 34.5% Year on Year in Value Terms, the Most Since Early 2020

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BEIJING – China's May exports growth slowed to a three-month low as US tariffs slammed shipments, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts.

US President Donald Trump's global trade war and the swings in US-China trade ties have in the past two months sent Chinese exporters, along with their business partners across the Pacific, on a roller-coaster ride and hobbled world growth.

Underscoring the US tariff impact on shipments, Customs data showed that China's exports to the United States plunged 34.5 per cent year on year in May in value terms, the sharpest drop since February 2020, when the Covid-19 pandemic upended global trade.

Total exports from the Asian economic giant expanded 4.8 per cent year on year in value terms in May, slowing from the 8.1 per cent jump in April and missing the 5 per cent growth expected in a Reuters poll, Customs data showed on June 9, despite a lowering of US tariffs on Chinese goods which had taken effect in early April.

Imports dropped 3.4 per cent from a year ago, deepening sharply from the 0.2 per cent decline in April and worse than the 0.9 per cent downturn expected in the Reuters poll.