China’s trade momentum faltered in October, with exports contracting -1.1% yoy, far below expectations for a 3.0% rise and the weakest reading since February. The figures suggest that the earlier tariff frontloading surge has fully dissipated, exposing underlying fragility in external demand. In particular, shipments to the U.S. tumbled -25.2% yoy, extending a seven-month run of double-digit declines. Exports to the EU inched up 0.9% and to ASEAN gained 8.9%.
Imports increased a modest 1.0% yoy, missing forecasts of 3.2%, as domestic consumption and industrial demand was muted. Purchases from the U.S. fell -23%, underlining the structural damage caused by persistent tariff barriers. Trade surplus stood at USD 90.07 B, reflecting sluggish imports rather than export strength.
The trade figures come amid renewed political friction between Beijing and Washington. Early October saw tensions flare after US President Donald Trump threatened 100% tariffs in response to China’s decision to expand export controls on rare earth metals. A meeting between Trump and President Xi Jinping in South Korea last week helped ease market nerves, resulting in a one-year extension of the bilateral truce that had been due to expire on November 10.
Still, the truce provides only limited near-term relief. U.S.-bound Chinese exports continue to face average tariffs of about 45%, well above the profit-neutral level of 35% identified by analysts.
