China’s exports fall 1.1% in October as shipments to US plunge 25%

China’s exports fell in October, dragged down by a sharp 25% drop in shipments to the United States, official data released Friday showed.

The world’s second-largest economy has been working to broaden its trade partnerships since Donald Trump’s presidential victory last November, anticipating a renewed trade confrontation similar to the one that dominated his first term. Beijing has stepped up engagement with Southeast Asia and the European Union in an effort to reduce reliance on the US market.

Although tensions between Washington and Beijing may ease temporarily after Trump and Chinese President Xi Jinping agreed last week to de-escalate their trade dispute, the lingering friction continues to weigh on global demand.

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According to China’s customs data, exports in October fell 1.1% from a year earlier, the weakest reading since February following an 8.3% surge in September. The decline was partly attributed to a high base from October 2024, when exports had grown by 12.6%, the fastest pace in over two years.

Despite its diversification efforts, no other market rivals the US in scale. China’s annual shipments to the US exceed $400 billion, and the recent slump in American demand has shaved about two percentage points off overall export growth, equivalent to roughly 0.3% of GDP, economists estimate.

Imports, meanwhile, edged up 1% year-on-year in October, slowing sharply from 7.4% growth in September. Analysts say China’s prolonged property sector downturn and weak consumer spending continue to dampen domestic demand.

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Exports to the US have now fallen by double digits for seven consecutive months, even as China expands trade with Southeast Asia and Africa.

Trump and Xi’s meeting in South Korea late last month yielded several steps aimed at easing tensions. Both sides agreed to reduce tariffs and delay new port fees imposed on each other’s vessels. Beijing also suspended some of its export controls on rare earth elements for a year and pledged to purchase more American soybeans and farm products. In return, Washington relaxed certain sanctions on Chinese firms.

Goldman Sachs economists said following the meeting that they expect China’s export volumes to grow between 5% and 6% annually, helping the country maintain global market share and support broader economic growth.

“The reduction in some of these tariffs as part of the latest U.S.-China trade ‘deal’ may provide a small boost to exports,” wrote Leah Fahy and Zichun Huang, China economists at Capital Economics. However, they noted that the effects are unlikely to appear until late in the fourth quarter.

A more substantial recovery in shipments to the U.S. could begin early next year and gather momentum by the second quarter, said Wei Li, head of multi-asset investments at BNP Paribas Securities (China).

At the China International Import Expo in Shanghai this week, Premier Li Qiang told global business leaders that Beijing remained committed to “free markets and free trade,” while criticising protectionist measures that, he said, disproportionately harm developing economies.

With inputs from agencies