China’s exports unexpectedly slide to worst since February as global trade pressure mounts

BEIJING – China’s exports unexpectedly slumped in October as overseas orders tapered off following months of front-loading to beat President Donald Trump’s tariffs, and as buyers watched to see how a volatile month in US-China trade ties would play out.

Outbound shipments from China shrank 1.1 per cent in October, the worst performance since February, Customs data showed on Nov 7, reversing from an 8.3 per cent rise in September, and missing a forecast for 3 per cent growth in a Reuters poll.

The figure was affected by a high base from last October when exports increased at their fastest pace in over two years, as factories began rushing inventory to major markets in anticipation of Mr Trump’s triumphant return to the White House.

Shipments to the US plunged by just over 25 per cent in October, while those to the European Union climbed 1 per cent, the slowest gain since a drop in February. 

Exports to some other major markets fell, with sales to South Korea, Russia and Canada all sinking by double digits. Shipments to everywhere but the US rose 3.1 per cent from a year earlier, the slowest expansion since February.

Imports ticked up at a much slower 1 per cent pace, compared to 7.4 per cent growth in September and a 3.2 per cent forecast rise.

Early indicators showed the economy lost some momentum in October. The official purchasing managers’ index fell to a six-month low and suggested that the wider world had taken in all the Chinese goods it could for now, with factory owners reporting a marked drop in new export orders.

Tensions between China and the US unexpectedly spiked in early October, after Mr Trump threatened 100 per cent levies on Chinese goods in response to Beijing expanding its export controls on rare earth metals.

The mood eased after he met President Xi Jinping last week in South Korea, when both sides agreed to extend their trade truce – previously scheduled to expire on Nov 10 – for another year.

Still, US-bound Chinese goods will face an average tariff rate of around 45 per cent, above the 35 per cent level that some economists say wipes out Chinese manufacturers’ profit margins.

Economists estimate the loss of the US market has cut export growth by around two percentage points, or roughly 0.3 per cent of gross domestic product (GDP).

China has sought to diversify its export markets in 2025 to offset the blow from Mr Trump’s tariff onslaught, though exporters report they are often selling to other parts of the world with thinner margins to defend market share.

Adding to the pressure on manufacturers, the country’s swelling trade surpluses with other countries have sparked protectionist pushback, amid concerns that its cheaply priced goods could flood overseas markets.

China announced an initiative this week to increase its imports which aims to make the country “the best export destination” and “open up win-win cooperation”.

However, insufficient domestic demand remains a hurdle.

Officials said in October 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 to 2030.

China’s trade surplus came in at US$90.07 billion (S$117.5 billion) in October, from US$90.45 billion a month prior, and missing a forecast of US$95.6 billion. REUTERS, BLOOMBERG