China's Economic Challenges: Slow Exports, Deflation and Trade Tensions

China's export growth hit a three-month low in May, reflecting pressures from U.S. tariffs. According to customs data, exports expanded by 4.8% year-on-year, dropping from April's 8.1% increase and falling short of Reuters' poll expectations of 5% growth.

Despite reduced U.S. tariffs in April, imports declined by 3.4% year-on-year, contrasting with the 0.9% downturn projected. The decline followed a period of overseas shipment rushes to evade President Trump's levies, highlighting ongoing tensions despite a 90-day levy suspension agreement between Beijing and Washington.

China's efforts to counter these challenges include monetary policy adjustments, such as benchmark rate cuts and a 500 billion yuan loan program aimed at bolstering domestic consumption. Still, deflationary pressures persist, with a 3.3% drop in the producer price index and contracting consumer prices, emphasizing the uncertain outlook as trade talks continue.

(With inputs from agencies.)