China experienced a sharp increase in exports ahead of impending U.S. tariffs, with a reported 12.4% rise in March. However, economists predict an eventual decline in shipments, expecting it may take years for exports to recover fully. The trade surplus with the U.S. hit $27.6 billion in March, but importers are expected to reduce purchases moving forward as they deplete stockpiles made in preparation for higher tariffs. The ongoing U.S.-China trade tensions are influencing import behaviors and export forecasts significantly.
After taking office, Trump first ordered a 10% increase in tariffs on imports from China. He later raised that to 20%. Now, China is facing 145% tariffs on most of its exports to the United States, based on the most recent revisions in Trump's trade policies.
But shipments are set to drop back over the coming months and quarters. We think it could be years before Chinese exports regain current levels.
Savvy U.S. importers likely saw tariff hikes coming in April onward and frontloaded imports, but that trend is likely to fall off as importers use up their inventories.
China's trade surplus surged to a record $992.2 billion in 2024 and its exports climbed 5.4%, helping to make up for sluggish growth at home.
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