Analysts say it could take time for Chinese exports to recover amid slowing global growth despite tentative signs of a thaw in tense trade relations between the world’s top two economies.
On Friday, U.S. President Donald Trump outlined the first phase of a deal to end the trade war with China and suspended a threatened tariff hike set for Oct. 15. But existing tariffs remain in place and officials on both sides said much more work needed to be done.
September exports fell 3.2% from a year earlier, the biggest fall since February, customs data showed on Monday. Analysts had expected a 3% decline in a Reuters poll after August’s 1% drop.
“The headline figures suggest that global demand softened last month, adding to the pressure from the U.S. tariffs that went into effect in September,” said analysts at Capital Economics.
Economists also attributed the export slowdown to a fading in the so-called “front-loading” effect. Some Chinese firms had rushed to ship goods to the United States ahead of the September deadline, supporting overall July and August export readings.
“We expect shrinking exports will likely be one of the biggest drag on China’s economic growth in the coming months, as the tariff impact will be further in place, along with the pay-back effects,” said Ting Lu, chief China economist at Nomura.
Total September imports fell 8.5% after August’s 5.6% decline, the lowest since May, and were expected to fall 5.2%.
Some sectors held a silver lining. China’s industrial metals imports, including iron ore and copper, surged in September fueled by firm demand at steel mills.
But analysts at ANZ noted volumes were buoyed by recovery from recent disruptions in Australia and Brazil, and may also have been lifted by restocking ahead of China’s 70th anniversary celebrations, suggesting overall demand remains weak.
Source: Reuters News