China’s exports to US plunge 33% as trade war takes toll

China’s export growth slumped to its weakest pace in six months as shipments to the US fell rapidly.

Overseas sales rose 4.4% year-on-year to $322 billion in August, according to the General Administration of Customs on Monday (September 8). This figure fell short of the 5.5% growth forecast.

Imports increased 1.3%, delivering a $102 billion trade surplus.

China’s trade is rapidly shifting this year

President Donald Trump’s tariffs have reduced direct demand from the US and caused companies to seek alternative markets or ship indirectly to the world’s largest economy.

Exports to the US fell 33% in August, marking the fifth consecutive month of double-digit declines. Meanwhile, shipments to the 10-member Southeast Asian trade bloc rose almost 23%, while exports to the European Union increased 10% and exports to Africa grew 26%.

Trade surplus continues to grow despite slowdown

Despite the slowdown, China’s trade surplus continues to easily surpass last year’s record of around $1 trillion, with overseas sales compensating for weak domestic demand.

Nevertheless, falling prices and competition mean that many companies are operating at a loss despite rising export revenues. Industrial profits fell nearly 2% in the period through July.

China’s new export orders indicator has been at its lowest level for several months, suggesting that external demand will weaken in the coming period.