China’s exports jump 5.8% in June as Trump halts tariff-trade war with Beijing

China’s exports rose by 5.8 per cent year-on-year in June, outperforming both analysts’ expectations and May’s 4.8 per cent gain. Analysts attributed this boost to a temporary tariff truce between Beijing and Washington, prompting companies to accelerate shipments before a looming August deadline for higher duties.

This rise was largely fuelled by a rush of orders from importers and retailers in the United States, who resumed purchases of consumer goods like footwear, apparel and toys following the easing of trade tensions. The temporary suspension of tariffs had come after a renewed trade truce between President Donald Trump’s administration and the Chinese government.

Geopolitical uncertainty lingers

Despite the June surge, trade between the two superpowers remained volatile. Exports to the US still fell 9.9 per cent in renminbi terms from January to June, though this was a smaller decline than previously recorded.

Fortune reported a 16 per cent year-on-year drop in June alone, which was a sharp improvement from May’s 34.5 per cent plunge. Analysts suggested that these figures reflected continued uncertainty as businesses grappled with unpredictable policy changes and the possibility of further tariff hikes by mid-August.

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Global diversification strategy in motion

Economists observed that China’s export growth was increasingly supported by diversified trade relationships. Yuhan Zhang of The Conference Board told Financial Times that China had expanded its shipments to regions like Southeast Asia, Africa and Europe, even as exports to the US contracted.

Exports to Asean countries jumped 14.3 per cent in the first half of the year, with trade to Vietnam and Thailand showing particularly strong gains. Similarly, exports to the EU rose 7.9 per cent, although imports from the bloc fell by nearly 5 per cent.

Zhang attributed this diversification to Beijing’s intensified investment in advanced manufacturing and its ongoing industrial upgrading efforts. He noted a marked increase in exports of robotics and other high-tech goods, which reflected both strong domestic policy support and global demand for such products.

Trade helping offset domestic weakness

China’s strong export performance in June offered a crucial buffer to a sluggish domestic economy still struggling with a prolonged property sector downturn. With consumer spending remaining tepid, exports played a critical role in sustaining GDP growth.

Policymakers in Beijing had reportedly leaned on foreign demand while aiming to hit their 5 per cent annual growth target. Some analysts, cited by Financial Times, predicted second-quarter growth might slightly exceed this target, with preliminary figures due shortly.

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Outlook still clouded by tariff risks

Despite the upbeat data, economists remained cautious about the longer-term trajectory. Zichun Huang of Capital Economics warned that Chinese manufacturers might face increasing headwinds, including persistent tariffs and constraints on aggressively capturing global market share through price cuts. Without new policy stimulus or further trade diversification, export growth could taper in the coming quarters, potentially dragging on economic momentum.

With the Trump administration continuing to accuse Southeast Asian countries of enabling transshipment of Chinese goods, further tariff tightening remained on the table. A high stakes meeting between European Commission President Ursula von der Leyen and President Xi Jinping, scheduled for next week, was also expected to touch on concerns over trade diversion into Europe.