China’s October Exports Fall, Driven by Declines in U.S. Trade

China’s exports contracted in October, falling 1.1% compared to the same period last year, as shipments to the United States plummeted 25%, according to government data released today.

The decline marks the weakest export performance since February, following an 8.3% increase in September. Imports rose 1% year-on-year, a slowdown from the 7.4% growth recorded in September. This trade data signals continued challenges for the world’s second-largest economy, even as recent diplomatic efforts aim to ease tensions with key trading partners. China’s shipments to the U.S. have now fallen for seven consecutive months, prompting a diversification of export markets toward Southeast Asia and Africa.

The recent easing of trade friction between China and the U.S., following a meeting between President Donald Trump and Chinese leader Xi Jinping in South Korea, may not immediately impact export figures. At the meeting, both leaders agreed to lower tariffs and postpone new fees on each other’s vessels, with China pausing some rare earth export controls and agreeing to increase purchases of U.S. agricultural products. While economists at Goldman Sachs predict export volumes could grow by 5-6% annually, helping China gain global market share, Capital Economics economists Leah Fahy and Zichun Huang noted that any boost from the tariff reductions won’t be visible until later this quarter.

Chinese Premier Li Qiang recently emphasized China’s commitment to “free markets and free trade” at the China International Import Expo in Shanghai, while also criticizing trade restrictions that harm developing nations. The ongoing property sector downturn and weak domestic consumption remain significant concerns for China’s economic outlook, as detailed in recent reports from the International Monetary Fund.

Officials anticipate a “meaningful” boost to U.S. exports may begin in the first quarter of next year, accelerating further in the second quarter.