Chinese exports plunge as trade tensions with the US hit the industrial giant

China’s exports unexpectedly fell 1.1% in October, their lowest since February, in a stark sign of the Chinese economy’s vulnerability to swings in US demand. The decline came as a surprise to markets, as Reuters analysts had expected a 3% increase, after an 8.3% jump in exports in September.

Experts say the main reason for the export slump is the resumption of tariff tensions with the United States. American importers have been stockpiling goods for months in preparation for the possible return of the Donald Trump administration and its tougher trade policies. After that stage, demand for Chinese goods fell sharply.

Analysts say the situation is yet another confirmation of China’s critical dependence on the US market. Despite Beijing’s efforts to expand trade ties with Southeast Asia, Latin America and the European Union, none of these areas can match the volume of trade with the US. The US imports more than $400 billion worth of goods from China each year, making the US the largest market for Chinese manufacturers.

The Chinese government has been promoting a policy of “economic self-sufficiency” for several years and supporting domestic consumption, but structural dependence on external demand remains a serious challenge. The decline in exports could increase pressure on industry, in particular the electronics, textiles and machinery sectors, which are traditionally focused on exports to the US.

According to economists, trade tensions with the US have already reduced Chinese export growth by about 2 percentage points, which is equal to about 0.3% of the country’s GDP. In the long term, this trend could slow the pace of economic recovery from the pandemic and the housing market crisis.

Despite the short-term downturn, analysts do not rule out that Beijing will try to compensate for the losses by more actively stimulating domestic demand, as well as increasing trade with countries of the Global South. However, experts emphasize that as long as the United States remains the main trading partner, any new tariffs or restrictions from Washington will continue to significantly affect the dynamics of Chinese exports.