China’s Trade Surplus Widens in May, But Export Growth Falls Short Amid Tariff Headwinds
China’s trade surplus expanded more than anticipated in May, bolstered by stable export activity and a notable contraction in imports. However, export growth failed to meet expectations, as elevated U.S. tariffs weighed on overseas demand.
Official data released Monday showed the trade surplus rose to $103.22 billion, surpassing forecasts of $101.10 billion and increasing from April’s $96.18 billion.
Exports—an essential contributor to China’s trade surplus—continued to grow but at a slower pace than expected. Year-over-year export growth stood at 4.8%, below the projected 5% and significantly down from April’s 8.1%.
Despite the drag from U.S. tariffs, China maintained strong export momentum in other global markets due to its central role in international supply chains. Shipments to the U.S. also saw some recovery following a partial easing of tariffs in mid-May.
Imports, on the other hand, dropped more sharply than expected, highlighting persistent weakness in domestic demand amid economic uncertainty and cautious consumer spending. Imports declined 3.4% from a year earlier—well below the anticipated 0.9% decrease and a steeper fall than April’s 0.2% drop.
Further developments are expected as China and the United States prepare to resume high-level trade discussions in London later Monday, after previous negotiations had stalled.
Last month, both nations agreed to temporarily reduce their respective tariffs: the U.S. lowered rates from 145% to 30%, while China cut its tariffs from 125% to 10%.
Nonetheless, tensions remain high. Beijing has pushed back against U.S. restrictions on its semiconductor sector, while Washington criticized China’s export controls on critical rare earth materials, raising concerns about potential global supply disruptions.
The trade report came shortly after separate data showed continued weakness in Chinese inflation during May. Ongoing economic uncertainty appears to be dampening both consumer and business spending, contributing to subdued import demand and reinforcing a broader disinflationary trend.
