China reported on Monday that exports increased by over 12 percent last month, exceeding forecasts as companies scrambled to get ready for US President Donald Trump’s fluctuating tariffs on his so-called “Liberation Day.” Ever since Trump began his worldwide tariff onslaught, which has primarily targeted Chinese imports, Beijing and Washington have been engaged in a fast-paced, high-stakes game of brinkmanship. According to tit-for-tat exchanges, Beijing has established a retaliatory 125 percent tariff on US goods, while the US has increased its duties on China to 145 percent.
According to data issued Monday by Beijing’s General Administration of Customs, shipments abroad increased by 12.4%, more than twice as much as the 4.6 percent forecast in a Bloomberg survey.
In an indication of recovering domestic consumption, imports decreased 4.3% during the same time period, which was better than the first two months of the year. Beijing also reported on Monday that, with $115.6 billion in sales from January to March, the US continued to be the top foreign market for Chinese goods. China’s exports to the US rose by almost 9% year over year last month, when the US levied a second wave of tariffs on Chinese goods, according to Beijing.
China’s senior leaders have committed to making domestic demand the primary driver of the country’s economy and have set an ambitious yearly growth target of about 5%. However, Trump’s trade war is posing new challenges to an already precarious recovery. By announcing tariff exclusions for smartphones, laptops, semiconductors, and other electronic goods that are largely sourced from China, the US side seemed to ease pressure on Friday.
Analysts ascribed the March spike to a rush to export in anticipation of Trump’s “Liberation Day” tariffs on all trading partners on April 2, which caused world markets to plummet. Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management, wrote in a note that the robust export data showed that trade had been frontloaded prior to the announcement of the US tariffs. “As the US tariffs increase,” he continued, “China’s exports will probably deteriorate in the upcoming months.”
“The uncertainty of trade policies is extremely high,” Zhang said.
Julian Evans-Pritchard, head of China economics at Capital Economics, said in a note that “in anticipation of even higher duties, demand from US importers continued to hold up fairly well” in March.
“But shipments are set to drop back over the coming months and quarters,” he added.
“It could be years before Chinese exports regain current levels.”
And the world’s second-largest economy continues to struggle with sluggish consumption and a prolonged debt crisis in its property sector.
Beijing last year announced a string of aggressive measures to reignite growth, including cutting interest rates, cancelling restrictions on homebuying, hiking the debt ceiling for local governments, and bolstering support for financial markets.
But after a blistering market rally last year, fuelled by hopes for a long-awaited “bazooka stimulus”, optimism waned as authorities refrained from providing a specific figure for the bailout or fleshing out any of the pledges.
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