China's exports in April exceeded market expectations with strong performance. Since April marks the period when the U.S.-China trade war intensified, it was widely expected that Chinese exports would plummet, but this prediction was overturned. As China's economic strength still holds up, attention is now focused on the outcome of U.S.-China trade negotiations starting on the 10th.
According to the General Administration of Customs of China on the 9th, China's export value in April was $315.69 billion (approximately 442.1 trillion won), reflecting an 8.1% increase compared to the same period last year. While this marks a decline of 4.3 percentage points from the growth rate recorded in March (12.4%), it significantly surpasses the market expectations compiled by Reuters (1.9%) and Bloomberg (2.0%). As a result, the cumulative export growth rate from January to April was recorded at 6.4% compared to the same period last year.
Initially, the market had projected that Chinese exports would see a significant slowdown starting in April. This was due to the additional tariffs imposed by U.S. President Donald Trump on Chinese imports, which was at about 20% until March but dramatically increased to a total of 145% starting in April. Therefore, when China's exports recorded double-digit growth in March, analysts commented that "Chinese corporations advanced their orders before the tariffs were imposed" and warned that "they may face strong headwinds starting in April."
Despite the better-than-expected performance in April, the prevailing outlook suggests that a decline in exports is inevitable, albeit at a different pace. Bloomberg noted, "The first official data released after the escalation of the trade war only shows the initial damage caused by high tariffs" and predicted that "the impact will become even more severe starting this month." Wang Qing, chief macroeconomic analyst at Dongfang Jincheng, a Chinese credit rating agency, also stated to the China Business News that "the impact of the excessively high tariffs imposed by the U.S. will begin to manifest in May," adding that "China's exports to the U.S. could decline by 70-80% compared to the previous year."
In reality, China's exports to the U.S. are rapidly deteriorating. In April, exports to the U.S. totaled $33.02 billion, a sharp decrease of 21.0% compared to the same period last year ($41.82 billion). Compared to the previous month, March, exports dropped by 17.6%. China is filling the void left by the U.S. with Southeast Asia. Exports to Vietnam (22.5%), Thailand (27.9%), and Indonesia (36.8%) have significantly increased.
As the U.S. and China prepare to enter their first official tariff negotiations in Switzerland on the 10th, the extent of the impact on China's exports will likely vary depending on the pace of discussions. On the 8th (local time), when asked if the tariffs on China could be lowered if negotiations go well, Trump said, "That might be possible," adding, "It couldn't go higher than 145%. I know the tariffs will decrease." HSBC also predicted that the U.S. could lower tariffs on Chinese imports to around 50%.
However, as both countries maintain the position that actions must be taken by the other party first, some predictions suggest that achieving meaningful results in the short term may be difficult. Consequently, China has recently introduced economic stimulus measures, such as lowering the benchmark interest rate and the reserve requirement ratio for banks, to inject liquidity into the market. This is intended to prepare for a prolonged battle by strengthening economic resilience. The relatively good export performance may also serve as a driving force to endure until favorable results are achieved.
Meanwhile, thanks to China's efforts to stimulate domestic demand, China's imports in April decreased by only 0.2% compared to the same period last year, an improvement from March (-4.3%). Accordingly, the trade surplus in April recorded $96.18 billion (approximately 134.9 trillion won).