China’s exports spike in March

China’s exports jumped 12.4 per cent in March from a year earlier in a last-minute flurry of activity as companies rushed to beat increases in tariffs imposed by the United States, and analysts forecast sharp setbacks ahead.

Imports fell 4.3 per cent to US$211.3 billion in March, the customs administration reported, far exceeded by exports worth US$313.9 billion, leaving a trade surplus of US$102.6 billion.

“But shipments are set to drop back over the coming months and quarters,” Julian Evans-Pritchard of Capital Economics said in a report. “We think it could be years before Chinese exports regain current levels.”

China’s trade surplus surged to a record US$992.2 billion in 2024 and its exports climbed 5.4 per cent, helping to make up for sluggish growth at home as the country slowly recovers from a crisis in its property market and lingering impacts of the COVID-19 pandemic.

After taking office, US President Donald Trump first ordered a 10 per cent increase in tariffs on imports from China. He later raised that to 20 per cent. Now, China is facing 145 per cent tariffs on most of its exports to the United States, based on the most recent revisions in Trump’s trade policies.

China has responded with 125 per cent tariffs on US products and other measures meant to pinch the US where it hurts most, such as controls on exports of critical minerals needed in high-tech manufacturing, such as electric vehicle production.

China’s trade surplus with the United States was US$27.6 billion in the month of March as its exports rose 4.5 per cent. For the January-March period, it logged a surplus of US$76.6 billion with the US even though exports were up only 2.3 per cent the first two months of the year.

“Savvy US importers likely saw tariff hikes coming in April onward and frontloaded imports,” ING Economics said in a report, but that trend is likely to fall off as importers use up their inventories while they watch for the latest twists and turns in unpredictable US trade policy.

“As a result, it’s likely that direct trade between the US and China will crater starting in April,” ING said.

Trade data already show some impact from the higher tariffs, with exports of lower value-added items like shoes and clothing falling, while shipments of computer chips, household appliances and vehicles surged. China’s biggest exports in the first three months of the year were electronic machinery, a broad category that includes smart phones and laptops, and high-tech products, the report shows.

China’s exports of rare earths fell nearly 11 per cent in the first quarter of the year as Beijing tightened controls on the strategically vital materials used in electric vehicles and other high-tech products.

The customs data showed total exports from the world’s second largest economy rose 5.8 per cent in the first three months of the year from a year earlier while imports sank seven per cent, leaving a trade surplus of US$273 billion.

Late Friday, Trump exempted most computer-related goods from the higher China-specific tariffs, including laptops, smartphones and the components needed to make them, though his administration says he plans to announce those within days. Such products accounted for nearly US$174 billion in US imports from China last year.

Still, the harsh US tariffs on Chinese products have raised questions about whether exporters might end up diverting their goods to other overseas markets as they give up on selling to American consumers due to the more than doubling of import duties.

The biggest increases in exports in March were to China’s Southeast Asian neighbours, which saw the dollar value of shipments from China jump eight per cent in March from a year earlier. Exports to Africa rose more than 11 per cent and those to India by nearly 14 per cent.

A customs administration spokesperson, Lyu Daliang, said China was facing a “complex and severe external situation” but that the sky would not fall. He pointed to China’s diversified export options and huge domestic market.

AP