China’s Export Growth Slows, U.S. Imports Plunge in August

China’s exports lost momentum in August, posting their weakest growth in six months, while shipments to the United States fell sharply amid ongoing trade tensions and tighter scrutiny on transshipments.

Export Growth Hits Six-Month Low

Customs data released on September 8 showed China’s exports rose 4.4% year-on-year in U.S. dollar terms, missing Reuters’ forecast of a 5% gain and marking the slowest pace since February. The slowdown partly reflects a high comparison base from last year, when exports surged at their fastest rate in nearly 18 months.

Imports increased 1.3%, also below the expected 3% rise, signaling continued weakness in domestic demand as China grapples with a prolonged property slump and rising job insecurity.

U.S. Trade Weakens Sharply

Shipments to the United States plunged 33% in August from a year earlier, while imports from the U.S. dropped 16%, underscoring the weight of President Donald Trump’s tough trade policies. Despite this decline, the U.S. remains China’s largest single-country trading partner, absorbing $283 billion worth of goods so far this year.

By comparison, exports to the European Union totaled $541 billion in the same period. Beijing has stepped up efforts to diversify trade with Southeast Asia, Europe, Africa, and Latin America, though none can fully replace U.S. demand.

Tariff Truce but Limited Progress

On August 11, Beijing and Washington agreed to extend their tariff truce for another 90 days, keeping U.S. tariffs at roughly 55% on Chinese goods and China’s duties at 30% on U.S. products.

However, talks remain stalled. A late-August visit to Washington by top Chinese trade negotiator Li Chenggang yielded little progress. Meanwhile, U.S. authorities are tightening checks on rerouted shipments, imposing a 40% tariff on goods deemed to be transshipped, which analysts warn could further strain China’s export outlook.

Mixed Signals from Manufacturing and Inflation Outlook

Despite trade headwinds, a private survey by RatingDog showed China’s manufacturing activity in August beat expectations, supported by a rebound in new export orders — a sign of resilient external demand.

Later this week, Beijing will release two closely watched inflation indicators: the Consumer Price Index (CPI) and Producer Price Index (PPI).

Goldman Sachs expects PPI to remain “deeply negative,” down 2.9% year-on-year, though monthly readings may turn positive amid government policies to curb excessive price cutting and rising raw material costs. CPI inflation is forecast to edge down 0.2% from a year earlier.