China’s trade report for August showed growing pressure from U.S. tariffs. Exports rose 4.4% yoy, below expectations of 5.0% yoy and the slowest pace in six months. Shipments to the U.S. plunged -33.1% yoy, while flows to Southeast Asia jumped 22.5% yoy, suggesting exporters may be rerouting goods through regional partners to cushion losses.
Imports also disappointed, rising just 1.3% yoy versus forecasts of 4.1% yoy. Imports from the U.S. dropped -16% yoy, reflecting both weaker domestic demand and the bite of tariffs. Still, the overall trade surplus widened from USD 98.2B to USD 102.3 B, beating expectations of USD 99.4B.
While the surplus provides headline support, the underlying dynamics are fragile. U.S. President Donald Trump has already threatened a 40% penalty tariff on goods deemed to be transshipped from China, raising questions about how long exporters can sustain the ASEAN workaround. Besides, economists warn that once U.S. tariffs rise above 35%, they become prohibitively high for many Chinese manufacturers.
Washington and Beijing extended their tariff truce by 90 days on August 11, locking in 30% U.S. duties on Chinese goods and 10% Chinese tariffs on U.S. exports. But with no path yet beyond the pause, uncertainty lingers over whether China can maintain export growth as tariff pressure intensifies.
