Turbulent Tides: China's Export Struggles Amid Trade Tensions
China's export growth hit a three-month low in May due to U.S. tariffs, impacting shipments and slowing factory-gate deflation. Tensions persist despite reprieves in tariff levies. Export growth may partially recover, but China's economy faces struggles from weak domestic demand and global trade uncertainties.
China's export growth experienced a marked deceleration in May, attributed to U.S. tariffs that severely impacted shipments. This decline exerted pressure on China's economy, as deflation in factory prices reached its deepest level in two years. The slowdown comes amid ongoing tensions from the global trade war initiated by U.S. President Donald Trump.
According to customs data, exports to the U.S. plummeted by 34.5% in May, marking the steepest drop since the pandemic's onset in 2020. Overall, China's exports grew 4.8% year-on-year, missing expectations. Despite some relief from reduced tariffs, U.S.-China trade relations remain contentious.
Low domestic demand and weak commodity prices further strain China's economy, complicating its recovery from the pandemic and trade disputes. Recent stimulus measures by Beijing intend to alleviate these pressures, but continued U.S. levies may hinder long-term growth, with trade negotiations set to resume.
(With inputs from agencies.)
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