Damage is done: China exports to US in May drops by most since Covid as trade flows reroute to Asean
Based on figures from Trade Data Monitor, Chinese shipments to the US in May plummeted 34.4 per cent year on year to US$28.8 billion – the steepest decline since pandemic disruptions began in February 2020, as Beijing rerouted trade flows.
Meanwhile, Chinese imports from the US in May fell 17.9 per cent to US$10.8 billion, suggesting a 'collapsing' trading relationship between the two biggest economies, noted John Miller, chief economic analyst at Trade Data Monitor.
Overall, Chinese exports in May increased 4.8 per cent on the year to US$316.1 billion, and imports declined 3.4 per cent to US$212.9 billion.
Trade reconfiguration
'The global trading system is going through its biggest reconfiguration since China's accession to the World Trade Organization in 2001 launched its historic export boom,' said Miller.
He pointed out that as the US market is drying up, manufacturers based in China are left with a hard decision – relocation or selling to other markets.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
In May, Chinese exports to 11 different trading partners increased at least 10 per cent on the year, four of which are Asean countries.
Shipments from China to Asean nations rose 15.2 per cent to US$58.4 billion. In particular, China's exports to Vietnam increased 22.2 per cent to US$17.3 billion, and exports to Thailand grew 21.8 per cent to US$8.8 billion.
Singapore shipments from China were up 12.8 per cent at US$7.7 billion.
Soybean purchases as political lever
China – the world's top soybean consumer and once a major US buyer – saw imports surge to a record level in May. The country purchased 13.9 million tonnes worth US$6.1 billion, representing a 36.2 per cent year-on-year volume increase and a 22.6 per cent rise in value.
'Chinese negotiators know they have leverage with soybean imports from the US, and Beijing's been cutting off its buying,' said Miller. In the first four months of 2025, US soybean exports to China dropped 51.3 per cent to US$2.4 billion.
Meanwhile, China has been snapping up soybean cargo from Brazil, the world's top soybean exporter. Imports from Brazil increased 9.6 per cent to US$11.3 billion.
While both powers have revived the trade truce to potentially ease tensions, the question is how much the two countries can sustain trade in the meantime, noted Miller.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
2 hours ago
- Business Times
Trump says US will start talks with China on TikTok deal this week
[NEW YORK] US President Donald Trump said on Friday (Jul 4) he will start talking to China on Monday or Tuesday about a possible TikTok deal. He said the United States 'pretty much' has a deal on the sale of the TikTok short-video app. 'I think we are gonna start Monday or to China, perhaps President Xi or one of his representatives, but we would pretty much have a deal,' Trump told reporters on Air Force One. Last month, Trump extended to Sep 17 a deadline for China-based ByteDance to divest the US assets of TikTok. A deal had been in the works this spring to spin off TikTok's US operations into a new US-based firm, majority-owned and operated by US investors, but it was put on hold after China indicated it would not approve it following Trump's announcements of steep tariffs on Chinese goods. Trump said the United States will probably have to get a deal approved by China. When asked how confident he was that China would agree to a deal, he said, 'I'm not confident, but I think so. President Xi and I have a great relationship, and I think it's good for them. I think the deal is good for China and it's good for us.' REUTERS
Business Times
3 hours ago
- Business Times
Vietnam Q2 GDP growth quickens on strong exports, US trade deal brightens outlook
[HANOI] Vietnam's economy grew at a faster pace in the second quarter of this year led by strong exports, in an encouraging sign just days after US President Donald Trump said he would place lower-than-threatened 20 per cent tariffs on many Vietnamese products. Concerns over the South-east Asian manufacturing hub's outlook had been growing in the run up to the trade deal announced on Wednesday (Jul 2), particularly as the United States is Vietnam's biggest export market. Gross domestic product growth in the April to June quarter accelerated to 7.96 per cent year on year, from the 6.93 per cent in the first quarter, government data showed on Saturday. It was just short of Hanoi's full-year growth target of at least 8 per cent. 'Economic performance in the first half of this year was positive and close to our target amid global and regional economic uncertainties,' the National Statistics Office (NSO) said. Exports were a bright spot in the last quarter, rising 18.0 per cent to US$116.93 billion from a year earlier, while imports were up 18.8 per cent at US$112.52 billion, translating into a trade surplus of US$4.41 billion, the NSO data showed. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Industrial production in the period rose 10.3 per cent, while June consumer prices rose 3.57 per cent. Trump announced on Wednesday the United States and Vietnam reached a trade deal, under which Vietnamese goods would face a 20 per cent tariff, with trans-shipments from third countries through Vietnam also facing a 40 per cent levy. Vietnam could import US products with a zero per cent tariff. The tariff rates were lower than an initial 46 per cent rate threatened by Trump in April. Vietnam hailed the deal as a boost for business and said negotiators were working to finalise details, as business groups awaited clarity on the finer points to assess the impact of the new tariffs. The United States is the largest export market for Vietnam, a regional manufacturing hub housing several multinational companies such as Samsung Electronics and Foxconn. The United States recorded a trade deficit of US$123 billion with Vietnam last year, one of its highest globally. Vietnam is also home to several Chinese companies, which analysts said are likely the main targets for the 40 per cent tariff on trans-shipments. China is Vietnam's largest two-way trading partner on which it relies heavily for components and materials for its manufacturing industries. Fitch Solutions said in a note on Friday that Vietnam's exports and investment will remain strong for the rest of the year and signalled upside risks for its 2025 GDP growth forecast of 6.4 per cent. 'With the new 20 per cent tariff, we think the government will speed up industrial upgrading and shift exports from low-margin goods to higher value-added products such as semiconductors,' it said in a note. Dominic Scriven, founder and chairman of investment firm Dragon Capital, said the trade deal is 'net-positive' and the potential GDP hit is less severe than feared. 'With external trade risk now moderating, attention can return to the country's core growth engine, the domestic and private sector economy,' he said. REUTERS
CNA
3 hours ago
- CNA
Trump says 'probably 12' tariff letters being sent out on Jul 7
US President Donald Trump said on Friday (Jul 4) that he had signed 12 trade letters to be sent out next week ahead of an impending deadline for his tariffs to take effect. "I signed some letters and they'll go out on Monday, probably 12," Trump told reporters aboard Air Force One, adding that the countries that the letters would be sent to will be announced on the same day. His comments come days before steeper duties -- which the president said on Thursday would range between 10 and 70 per cent -- are set to take effect on dozens of economies, from Taiwan to the European Union. The tariffs were part of a broader announcement in April where Trump imposed a 10 percent duty on goods from almost all trading partners, with a plan to step up these rates for a select group within days. But he swiftly paused the hikes until Jul 9, allowing for trade talks to take place. Countries have been pushing to strike deals that would help them avoid these elevated duties. So far, the Trump administration has unveiled deals with the United Kingdom and Vietnam, while Washington and Beijing agreed to temporarily lower staggeringly high levies on each other's products. As his Jul 9 deadline approaches, Trump has repeatedly said he plans to inform countries of US tariff rates by sending them letters. Aboard Air Force One on Friday, Trump said sending notices would be much easier than "sitting down and working 15 different things". He added: "You know, with the UK, we did that. And it was great for both parties. With China, we did that, and I think it's very good for both parties." But he said it was "much easier to send a letter saying, 'Listen, we know we have a certain deficit, or in some cases a surplus, but not too many. And ... this is what you have to pay, if you want to do business (with) the United States.'"
