Exports dropped 1.1% year-on-year, reversing an 8.3% rise in September and falling short of economists’ expectations for a 3% gain. The decline marks China’s worst export performance since February and comes after months of front-loading U.S. shipments to beat President Donald Trump’s renewed tariff measures.
Analysts said the pullback was largely due to the fading rush to ship goods before tariff deadlines.
“It appears the rush to ship goods to the U.S. ahead of tariff hikes subsided in October,” said Zhang Zhiwei, chief economist at Baoyin Capital Management. “With export momentum now waning, China may need to rely more heavily on domestic demand.”
Chinese shipments to the United States plunged 25.17% from a year earlier, while exports to the European Union and Southeast Asia — regions Beijing has targeted to reduce U.S. reliance — rose just 0.9% and 11%, respectively.
The decline underscores the challenge facing the world’s second-largest economy as it seeks to maintain growth while global demand slows.
“Chinese exports cannot continue to grow forever — not only because of the U.S., but because the global economy is slowing,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific at Natixis. “It’s going to be much tougher for China in the fourth quarter and the first half of 2026.”
The Chinese yuan weakened slightly against the U.S. dollar after the data’s release, marking its first weekly loss in a month.
Tariff Truce Brings Temporary Relief
Last week, traders welcomed news that Trump and President Xi Jinping had agreed to a one-year truce, trimming some tariffs and pausing additional trade restrictions. But the average tariff rate on Chinese goods bound for the U.S. remains around 45%, far above the 35% level that analysts say erodes most manufacturers’ profit margins.
“The truce will stabilise the near-term outlook, but both countries will continue reducing interdependence,” said Woei Chen Ho, economist at UOB Singapore. “The U.S. share of China’s trade will keep shrinking.”
China’s trade surplus with the U.S. widened to $24.76 billion in October, up from $22.82 billion in September, reflecting a sharper fall in imports than exports.
At the same time, Beijing is seeking closer trade ties with the European Union, signalling new prospects for investment deals. Last month, China’s trade surplus with the EU reached $21.9 billion.
Domestic Demand Still Weak
China’s imports rose just 1% year-on-year, the slowest pace in five months, compared with a 7.4% increase in September. Officials have pledged to lift household consumption as a share of GDP over the next five years, following new policy guidelines for 2026–2030.
Energy and agricultural imports were a bright spot: soybean, crude oil, and iron ore purchases all increased, buoyed by competitive prices and strong refinery demand. But copper imports, a key indicator for construction, fell due to high prices and the ongoing property market slump.
Analysts at Nomura said Beijing’s next focus will likely shift toward fiscal expansion to stabilize growth.
“With intensifying headwinds from weaker exports and retail sales, we expect policy efforts to pivot toward ensuring short-term stability,” the bank noted.
Despite the tentative tariff truce, economists warn that China faces a more difficult road ahead — balancing global trade pressures, soft domestic demand, and persistent uncertainty in relations with Washington.