China’s April exports to U.S. plunge 21%, overall shipments jump 8.1%

China’s exports surged in April on the back of a jump in shipments to Southeast Asian countries, offsetting a sharp drop in outbound goods to the U.S. as prohibitive tariffs kicked in.

Exports jumped 8.1% last month in U.S. dollar terms from a year earlier, according to data released by customs authority on Friday, sharply beating Reuters’ poll estimates of a 1.9% rise.

Imports slumped by just 0.2% in April from a year earlier, compared with economists’ expectations of a 5.9% drop.

China’s shipments to the U.S. plunged over 21% in April year on year, while imports dropped nearly 14%, according to CNBC’s calculation of official customs data. Chinese U.S.-bound shipments had risen 9.1% in March, as exporters rushed to frontload orders ahead of tariff hikes.

In the first four months this year, China’s exports to the U.S. dropped 2.5% while imports fell 4.7% from a year earlier, according to official data.

The surge in overall exports could be partly due to transshipment through third countries and contracts that were signed before the tariffs were announced, Zhiwei Zhang, president and chief economist at Pinpoint asset management said in a note. Zhang expects trade data to weaken gradually in the next few months.

China’s exports to the Association of Southeast Asian Nations surged 20.8% in April from a year earlier, accelerating from a 11.6% growth in March. While Vietnam and Malaysia remained the main destinations for Chinese exports to the region, Indonesia and Thailand saw shipments from China grow 37% and 28% year on year, respectively.

Meanwhile, China’s exports to the European Union rose 8.3%, while imports fell 16.5% year on year. Exports had risen by 10.3%, while imports had dropped 7.5% in March.

U.S. President Donald Trump has placed tariffs of 145% on imports from China, prompting it to retaliate with tariffs of 125% on American imports. So far, both sides have sought to blunt the economic impact of triple-digit levies by granting exemptions on certain critical products.

The number of container vessels from China to the U.S. had dropped dramatically toward the end of April, Raymond Yeung, chief economist for Greater China at ANZ Bank said in a note Thursday.

Chinese authorities have ramped up stimulus efforts in recent weeks to counter the impact from tariffs on its economy, with steps including easing monetary policy and measures to support tariff-hit businesses.

China’s factory activity fell to a 16-month low in April, with a gauge on new export orders dropping to its lowest since December 2022.

Concerns have been growing that the fallout from tariffs would soon spill over to the job market, with Goldman Sachs estimating the county could lose 16 million jobs, or 2% of its labor force, involved in the production of U.S.-bound goods.

The latest purchasing managers’ index indicated that employment fell across the board last month, as manufacturers started to halt production and put workers on paid leave.

Local Chinese governments and major businesses have voiced support to help tariff-hit exporters redirect their products to the domestic market for sale, a move that will likely deepen deflationary pressure in the country.

China is set to release its consumer and wholesale inflation data on Saturday, which will likely show a sustained deflation. Consumer price index is forecast to slip 0.1% from a year ago and the producer price index decline 2.8%, according to economists polled by Reuters.

The benchmark CSI 300 index fell 0.23% on Friday. Chinese offshore yuan was steady at 7.2483 per U.S. dollar.

Investors would follow closely the upcoming meeting between U.S. and Chinese officials in Switzerland over the weekend that has raised the prospects for a potential de-escalation in the ongoing trade war.

The planned meeting would mark the first high-level U.S.-China trade talks since the latest tariff escalations in April. U.S. Senator Steve Daines met Chinese Premier Li Qiang in Beijing in March.

While reaching a comprehensive deal is likely to be complex and time-consuming, a phased rollback of tariffs from both sides is possible, although analysts are split on the pace of such de-escalation.

“Tariff de-escalation, if it materializes, would serve as a major positive for Chinese equities,” said Laura Wang, equity strategist at Morgan Stanley, while cautioning that the negotiation process would be “lengthy, with ups and downs.”

The investment bank projects U.S. effective tariffs on Chinese goods could be lowered from the current prohibitive levels to a terminal rate of 45% by year-end, while a “durable resolution remains elusive.”

A slew of Wall Street banks had lowered their forecasts for China’s economic growth this year to around 4%, citing tariff-inflicted pains, what would be a significant shortfall to Beijing’s growth target of around 5%.