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Chinese exports unexpectedly fell in October after months of front-loading US orders to beat President Donald Trump’s tariffs, in a stark reminder of the manufacturing juggernaut’s reliance on American consumers even as it woos buyers elsewhere.
The world’s second-largest economy has pushed hard to diversify its export markets since Trump won last November’s presidential election, bracing for a resumption of the trade war that dominated his first term in office, and seeking closer trade ties with Southeast Asia and the European Union.
But no other country comes close to matching China’s annual sales of more than $400 billion in goods to the US, a loss economists estimate has cut China’s export growth by around 2 percentage points, or roughly 0.3 per cent of GDP.
The October customs data yesterday underlined that point, as China’s exports shrank 1.1pc, the worst performance since February, reversing from an 8.3pc rise in September, and missing a forecast for 3.0pc growth in a Reuters poll.
“It appears the rush to ship goods to the US ahead of tariff hikes subsided in October,” said Zhang Zhiwei, chief economist at Baoyin Capital Management.
“With export momentum now waning, China may need to rely more heavily on domestic demand.”
Chinese shipments to the US tumbled 25.17pc year-on-year, the data showed, while those to the European Union and Southeast Asian economies – big trading partners with whom policymakers have sought to bolster ties amid tariff tensions with Washington – grew by just 0.9pc and 11.0pc, respectively.
Most analysts largely agree Chinese manufacturers have pushed as many goods into the world as possible for now.
“I think the PMI was already warning us that Chinese exports cannot continue to grow forever, and it’s not only because of the US but because the global economy is slowing,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific at Natixis.
“Exports through Vietnam to the US will decelerate once the front-loading is over, and we’re there. So I think it’s going to be much tougher for China in the fourth quarter, which means it’s going to be tougher in the first half of 2026 as well,” she added.
China’s yuan edged lower against the dollar following the data’s release, registering its first weekly decline in a month.
Traders and investors on both sides of the Pacific breathed a sigh of relief last week after Trump and Chinese President Xi Jinping agreed to trim their tariffs and pause a raft of other measures for one year, easing concerns the two leaders might abandon their highly-anticipated meeting after a renewed spike in tensions in early October.
But US-bound Chinese goods will still face an average tariff rate around 45pc, above the 35pc level that some economists say wipes out Chinese manufacturers’ profit margins.
Woei Chen Ho, economist at UOB Singapore, said the US-China trade truce struck by the two leaders last month would stabilise the outlook in the near-term, but forecast that “both countries will try to reduce their interdependence and we’re going to see the US share of China trade, especially exports, drop.
China’s trade surplus with the US came in at $24.76bn in October, rising from $22.82bn a month prior.
In line with its push to broaden its trade ties, Beijing on Thursday flagged fresh prospects for a trade or investment deal with the European Union, the world’s third-largest economy. Last month, China posted a trade surplus of $21.9bn with the 27-strong bloc.
Insufficient domestic demand remains a hurdle to driving growth, too.
That was underlined by the imports data, which expanded at their slowest pace in five months, up 1.0pc compared to 7.4pc growth in September and a 3.2pc forecast rise.
Officials said last month China will aim to raise the percentage of household consumption of GDP “significantly” over the next five years, after a key conclave of the ruling Communist Party’s Central Committee mapped out economic and policy goals for 2026-2030.
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