China’s export growth fell in April after Donald Trump’s triple-digit tariffs took effect, in another sign of the damage the US president’s trade war is causing the world’s two largest economies as they prepare for de-escalation talks.
Outbound shipments grew by 8.1% in US dollar terms last month, according to customs data released on Friday, compared to growth of of 12.4% in March, when businesses rushed to get their orders shipped before the sky-high tariffs took effect. China’s exports to the US declined by 2.5% in April, while its imports from the country fell by 4.7%.
The trade figures, though not as bad as economists had expected, add to a slew of economic data pointing to the significant toll the ongoing trade war is already taking on both the Chinese and US economies.
Last week, official data showed China’s factory activity contracted at its fastest pace in 16 months in April, adding urgency to Beijing’s efforts to roll out fresh economic stimulus. In the US, the economy went into reverse in the first quarter, its first contraction in three years, as businesses stockpiled goods in anticipation of Trump’s “Liberation Day” tariffs, which began in April.
The stark numbers illustrate what’s at stake this weekend when Trump’s top trade officials meet with their Chinese counterparts in Geneva, Switzerland to discuss a possible de-escalation of the tariff war. The US has placed at least a 145% tariff on most Chinese imports, and China has responded with a 125% tariff on most US imports. As a result, trade between the two sides is falling sharply, according to logistics experts.
Ships now pulling into US harbors from China are the first to be subject to the tariffs that America is imposing on most Chinese imports. That means, in a matter of weeks, consumers will face higher prices and shortages of certain items.
US Treasury Secretary Scott Bessent, who will be in Geneva along with Trade Representative Jamieson Greer, has poured cold water on prospects of a deal, saying only that he’s hoping for a “de-escalation.”
Trump appeared more sanguine. When asked Thursday whether he would lower tariffs on China if talks this weekend went well, Trump said: “Well, it could be.”
“I mean, we’re going to see,” he added. “Right now, you can’t get any higher. It’s at 145, so we know it’s coming down. I think we’re going to have a very good relationship.”
Deep-seated challenges
Trump told a conservative radio host on Wednesday that he would raise the case of jailed Hong Kong media tycoon Jimmy Lai “as part of the negotiation.” Lai, a pugnacious former publisher whose now shuttered tabloid Apple Daily was a regular thorn in Beijing’s side, is in the midst of a national security trial that could send him to prison for life.
According to Reuters, citing unnamed sources, the negotiating teams are expected to discuss tariff reductions, as well as duties on specific products, export controls and Trump’s decision to end de minimis exemptions on low-value imports.
Facing a number of deep-seated economic challenges at home, including a crisis in the property sector and a reluctance among consumers to spend, China has been relying heavily on its export industry to boost overall growth.
Although Beijing has been working to reduce its trade reliance on the US since the first trade war with Trump kicked off in 2018, America remains an monumentally important market.
Economists at investment bank Nomura wrote in a research note last week that the US directly accounted for 14.7% of China’s total exports of goods last year. The figure rises to 20.6% if shipments via Hong Kong, Southeast Asia and Mexico are factored in.
Around 2.2% of China’s gross domestic product is directly affected tariffs, they estimated, so China may lose 1.1% of its GDP, if its exports to the US are halved. “The actual loss will be larger as the shock ripples through to other sectors, especially the services sectors that facilitate merchandise exports,” they wrote.
This story has been updated with additional reporting and context.
