Volkswacht Bodensee - China's exports start year slow as US trade war intensifies

Over a month into his second term as US president, Donald Trump has slapped sweeping tariffs on the export-dependent nation, citing Beijing's failure to stem fentanyl flows as justification.

China last year saw exports surge to a record high -- a key economic lifeline as persistent woes including slow consumption and a property sector crisis weighed on activity.

While experts say the full impact of Trump's tariffs on China's economy remains to be seen, early signs indicate that its overseas shipments are bound for choppy waters.

Exports in US dollar terms in January and February combined grew 2.3 percent compared to the same period last year, official data from China's customs administration showed Friday.

The reading came in short of a Bloomberg forecast, which had anticipated exports to grow 5.9 percent during the first two months of 2025. It also represented a slowdown from 10.7 percent growth in December.

The deceleration could be "partly due to the slowdown of export front loading, which was strong late last year to avoid the trade war", wrote Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management.

The full extent of damage caused by new US tariffs -- imposed in two rounds of 10-percent blanket hikes in early February and this week -- will likely begin to be seen next month, said Zhang.

Imports, meanwhile, fell sharply during the first two months, a sign that domestic consumption remains mired in a slump.

Shipments into China during the period fell 8.4 percent, well below a Bloomberg forecast of one percent growth, customs data showed.

In addition to weak spending, the fall in imports could have been due to a decline in "imported parts and components as inputs for re-exports", wrote Zhang.

The figures come as China holds its biggest annual political gathering in Beijing, known as the "Two Sessions".

At Wednesday's opening session of the country's rubber-stamp legislature, Premier Li Qiang announced a national growth target of "around five percent" for this year -- the same as 2024.

Many experts say that goal is ambitious, given the accelerating headwinds facing the world's second-largest economy.

K.Hofmann--VB