Exports from China surged 7.2% in July compared to a year earlier, which was more than expected, reports The New York Times. The figures indicate Chinese companies scrambled to ship goods to Southeast Asia and other regions, often for onward shipment to the United States, before President Trump’s new tariffs could kick in. 

Meanwhile, its exports to Southeast Asia and Africa, key regions for reshipment to the United States, rose more than twice as fast as its overall exports, and exports to the European Union, its main alternative to the American market, were also up very strongly.

By contrast, exports directly to the United States were down by more than a fifth in July, as buyers in the United States appeared reluctant to pay Trump’s extra 30% tariffs.

China’s imports were also up 4.1% compared to July 2024. 

A recent crash in the real estate market means China’s economy relies heavily on exports, as millions of Chinese households find themselves unable to afford the vast quantities of merchandise being produced by China’s factories.

The American trade deficit with China soared after China entered into the World Trade Organization in late 2001, and reached almost $1 trillion last year, with its surplus in manufactured goods equal to a tenth of the country’s entire economic output.

On August 5, the U.S. announced that its overall trade deficit had narrowed in June to $60.2 billion, the smallest in nearly two years.

All eyes will now be turning to the issue of transshipment. During the trade war began during Trump’s first administration, Chinese companies started moving the final stages in production to countries such as Vietnam, Malaysia and Mexico, in order to avoid or ameliorate duties. Now, Trump has begun imposing 40% tariffs on transshipped goods, and a senior administration official said last week that the United States plans to release new rules “in a few weeks” to broaden the rules for what qualifies as transshipment.