China’s Exports Contract as US Shipments Plunge 25%; Trade War Eases Slightly After Trump-Xi Talks

China's goods exports to the US have been experiencing double-digit declines for seven consecutive months, while China has diversified its export markets to regions like Southeast Asia and Africa. The decline in October was also influenced by the high base for the same month in 2024, when export growth exceeded 12.6%, the fastest rate in two years.

Imports increased 1% last month, compared to 7.4% growth in September last year. Economists say the prolonged slowdown in the property sector and weak domestic consumption remain concerns.

At their meeting in South Korea in late October, Trump and Xi Jinping agreed to reduce tariffs and postpone new port fees imposed on each other's ships. China suspended some of its export controls on rare earth elements for a year and agreed to purchase more soybeans and other agricultural products from the US. The US also eased some restrictions on Chinese companies.

Goldman Sachs economists said after the Trump-Xi meeting that they expect Chinese export volumes to grow by 5 to 6% annually. This will help China gain global market share and boost its overall economic expansion.

Leah Fahy and Jichun Huang, China economists at Capital Economics, wrote in a recent note that the reduction of some of these tariffs under the latest US-China trade agreement could provide a slight boost to exports. But they said this would not be visible until the end of the last quarter of this year.