China's Exports Surpass Forecasts Following U.S. Trade Deal

BEIJING — China's exports increased more rapidly in June than anticipated, surpassing market forecasts after trade disputes with the United States softened following recent discussions between the two countries.

In June, outbound shipments increased by 5.8% compared to the same period last year, according to the China General Administration of Customs announced on Monday. This number exceeded expectations set by numerous economists and marked a rise from the 4.8% annual growth recorded in May.

However, shipments to the U.S. decreased by 16.1% in June when compared to the previous year, due to high tariffs and concerns about the overall global tariff situation, which hindered trade between the world's two biggest economies.

Washington and Beijing came to an agreement last month In their ongoing commercial conflict, they have agreed to reduce most of the tariffs imposed on each other. At the meeting held in London, U.S. and Chinese representatives presented a plan under which China will speed up deliveries of rare-earth materials and other essential supplies to the U.S., while Washington will ease certain limitations on accessing cutting-edge American technology.

The outcomes of this relaxation can be observed in China's exports to the United States last month. Although the number still fell into negative ground, the 16.1% decrease represented a significant enhancement compared to a drop of 34.5% in May and a 21% reduction in April.

Economists cautioned against viewing the drop as a sign of returning to usual conditions. They noted that any progress made was probably short-lived and highlighted how much President Trump's reinstatement has disrupted the business ties between the nations.

Some of this rebound may be attributed to actions taken by American importers who are trying to accumulate Chinese products amid concerns about potential increases in tariffs between the two nations," noted Zichun Huang, an economist from Capital Economics, in a message sent to clients following the latest data announcement. "Exports to the U.S. likely won’t maintain such strong performance over an extended period.

Many uncertainties still surround U.S.-China trade relations, despite the recent change in rhetoric. The agreement reached in London established a 90-day temporary pause on tariffs, suggesting both parties have until August 12 to finalize a lasting arrangement.

Last week, the administration of Donald Trump wrote letters to multiple nations Highlighting increased tax levels set to take effect on August 1st. Although this delays an earlier scheduled date in July by three weeks, it still confirms harsh taxes on certain countries. Trump stated he planned to impose a 50% tax on imports from Brazil and 35% charges on specific products coming from Canada. Additionally, he proposed a 50% duty on copper and suggested tariffs as high as 200% on medicines.

The correspondence indicated that even greater tariffs could be applied to goods routed through third countries heading toward the U.S., a step generally viewed as targeting Chinese-origin exports those who journey across different nations en route to America.

Shipments from China to the U.S. during the first six months of this year decreased by 10.9% compared to the same time frame in 2024, whereas China's overall exports to every country increased by 5.9% during that period, matching the 5.8% annual growth rate that China recorded for the entire year of 2024.

Although China's total exporting situation stayed mostly the same following Trump's resurgence this year, Chinese exports to the U.S. have significantly declined, but they have been compensated for in other regions.

Concerns in Washington that numerous products intended for the U.S. had been diverted via Southeast Asia led the Trump administration to negotiate an agreement with Vietnam. The agreement imposes tariffs A 40% tax on products passed through Vietnam to the U.S. in an effort to block a pathway for products coming from China.

As per Chinese customs statistics published on Monday, shipments to the Association of Southeast Asian Nations—which represents China's biggest trade partner—increased by 13.0% during the initial six months compared to the previous year. Shipments to the European Union, which consists of 27 countries recognized as China's second-largest trade partner, went up by 6.6% within the same period.

Supported by robust exports and Beijing's economic support policies, China's economy has maintained a relatively stable position this year. According to China, its gross domestic product grew by 5.4% compared to the same period last year in the first quarter of 2025, as businesses increased deliveries due to anticipation of rising tariffs.

According to economists interviewed by The Wall Street Journal, they anticipate the economy expanded by 5.2% during the second quarter, although some expect a slowdown in economic growth for the latter part of the year. The National Bureau of Statistics plans to publish GDP data on Tuesday.

In the face of ongoing doubts within its exporting industry, Beijing has aimed to stimulate internal consumption by lowering interest rates, adding funds to the monetary framework, and keeping a “cash-for-clunkers”-style trade-in program to encourage consumer spending.

The Monday import figures indicated early signals of improvement in local consumption. According to the customs agency, imports increased by 1.1% in June compared to the previous year, marking a rise from May's 3.4% annual decrease and surpassing the 0.5% drop anticipated by interviewed analysts.

This resulted in a trade surplus of $114.78 billion for China in June, increasing from the $103.22 billion surplus recorded the prior month and exceeding the $111.3 billion estimate made by analysts.

The initial rise in imports this year can mostly be attributed to a statistical anomaly, as the comparative figure was lower in June 2024, according to Huang from Capital Economics.

This article was contributed by Grace Zhu.

Contact Jonathan Cheng at Jonathan.Cheng@wsj.com