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China’s exports surged last month in a sign of a rush to dispatch shipments before Donald Trump’s “liberation day” tariffs triggered a full-blown trade war between the world’s two largest economies.
Exports rose 12.4 per cent in US dollar terms in March on a year earlier, figures from China’s customs administration showed on Monday, well above expectations and the biggest rise since October. Imports fell 4.3 per cent.
Trump’s administration had already imposed additional tariffs of 20 per cent on China in March, before a dramatic tit-for-tat escalation that drove levies well above 100 per cent on each other’s goods.
The worsening trade war has shaken international markets, global boardrooms and shipyards, which have been hit by cancellations of orders.
Washington last week paused sweeping “reciprocal” tariffs on its other trading partners while raising them on China as it sought to isolate Beijing, which on Friday retaliated by ramping up its own measures to 125 per cent.
Global stocks were set to rebound on Monday following dramatic sell-offs last week, with indices in China, Hong Kong, and Japan rising and futures for US and European markets pointing to gains later in the day.
“The sky won’t fall,” China’s customs administration spokesperson Lu Daliang said on Monday, according to state media. He pointed to “vast” domestic demand and reiterated a wave of official comments that emphasise the country’s resilience.
China’s economy has relied heavily on exports to support growth over the past year amid a property sector slowdown and weak domestic consumption, which Beijing is battling to revive. Last week, the government rushed to support the domestic stock market.
On Friday, the US said levies on smartphones and other consumer electronics, as well as some semiconductors and chipmaking equipment, would be exempt, but Trump on Sunday said the reprieve would only be temporary.
Speaking to reporters aboard Air Force One on Sunday night, Trump said he and his team would “talk to companies” and that there would be flexibility “for some products”, without specifying.
While the March data showed a jump in exports, economists anticipate a different environment in coming months in light of the trade war. Goldman Sachs cut its real GDP growth forecast for China last week to 4 per cent, from 4.5 per cent, citing “sharply declining exports to the US”.
“We think it could be years before Chinese exports regain current levels,” said Julian Evans-Pritchard, chief China economist at Capital Economics, adding that there were “already signs of shipments being rerouted via third countries”.
Exports to the US rose 4.5 per cent in March. But they rose more sharply to south-east Asia, increasing 17 per cent to Vietnam and 18 per cent to Thailand. Both were targeted for high levels of US tariffs, which have since been paused.
China’s trade surplus with the US, which Trump has repeatedly cited as justification for the tariffs, was $76.6bn in the first quarter.
China’s leader Xi Jinping is visiting Vietnam, Malaysia and Cambodia this week, where he is seeking to strengthen ties, and warned that trade wars “will produce no winner”. Last week, Xi hosted Spanish Prime Minister Pedro Sánchez in Beijing, in the first significant diplomatic encounter since the tariff escalation.
Additional reporting by Arjun Neil Alim and William Sandlund in Hong Kong and Wang Xueqiao in Shanghai
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