Last month, total exports declined by 1.1 percent compared to the previous year, according to customs data. This marks the first decrease since February of this year.
The decline follows a robust export growth of 8.3 percent in September. Exports to the United States, China’s largest trading partner, fell by 25 percent year-on-year. Tensions between the two economic powerhouses escalated in the weeks leading up to the meeting between Chinese President Xi Jinping and U.S. President Donald Trump.
In response, China announced new restrictions on the export of rare earth metals last month. Trump retaliated by threatening to impose an additional 100 percent tariff on Chinese goods. These threats were retracted after Xi and Trump reached an agreement at the end of October.
China postponed the export restrictions on rare earth metals for one year. Additionally, China committed to purchasing significant quantities of soybeans and other American agricultural products and agreed to continue collaborating with the U.S. to halt the flow of fentanyl from China to the U.S. In exchange, Trump reduced the import tariffs on Chinese goods from 57 percent to 47 percent.
Thus far, Chinese exports have shown resilience, as the country managed to offset the decline in exports to the U.S. by increasing shipments to other countries. In October, exports to the European Union grew by only 1 percent, the lowest growth rate since a decline in February of this year. Exports to other key markets, such as South Korea, Russia, and Canada, also decreased in October.
