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China’s Export Growth Beats Expectations as Trade Truce With U.S. Takes Hold

July 14, 2025 | By CNY Trends

China’s exports rose 5.8% in June compared to the same month a year earlier, outperforming expectations and building on May’s 4.8% growth. The data, released Monday by the General Administration of Customs, comes on the heels of a newly announced trade truce with the United States, signaling short-term relief in the two countries’ strained commercial relationship.

While overall export growth accelerated, Chinese shipments to the U.S. fell 16.1% in June—an improvement from the 34.5% drop in May. Analysts noted that recent easing in trade tensions may have contributed to the rebound. Last month, U.S. and Chinese officials met in London and agreed to roll back most tariffs within a 90-day grace period set to expire on August 12.

As part of the deal, China agreed to expedite shipments of rare-earth minerals and other key inputs to the U.S., while Washington loosened restrictions on access to certain advanced technologies.

“Some of this recovery probably reflects efforts by U.S. importers to stockpile Chinese goods due to fears of renewed tariff escalation between the two countries.” — Zichun Huang, Capital Economics

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Lingering Risks and Trade Re-Routing

Despite the temporary truce, uncertainties persist. The Trump administration has issued new tariff threats set to take effect August 1, including a 50% levy on Brazilian goods and up to 200% tariffs on pharmaceuticals. Goods transshipped through Vietnam to the U.S.—many suspected to be of Chinese origin—will now face a 40% duty.

Chinese exports to ASEAN countries rose 13.0% in the first half of the year, while shipments to the European Union grew by 6.6%. These markets appear to be absorbing some of the volume lost from declining U.S. demand.

In the first half of 2025, China’s total exports rose 5.9% from the previous year, even as exports to the U.S. dropped 10.9% over the same period.

Domestic Stimulus and Economic Outlook

Beijing has bolstered domestic demand through interest rate cuts, liquidity injections, and consumer stimulus programs such as a vehicle trade-in initiative. These measures are beginning to show results. Imports rose 1.1% in June, reversing a 3.4% drop in May and beating forecasts.

China’s GDP expanded 5.4% in Q1 2025, driven by export acceleration amid tariff fears. Economists polled by the Wall Street Journal expect Q2 growth of 5.2%, with official figures due to be released Tuesday.

China’s June trade surplus reached $114.78 billion, up from $103.22 billion in May, exceeding expectations of $111.3 billion.

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