China’s exports reached a record so far this year, as higher US tariffs and the threat of more to come drove frontloading of shipments.
The value of sales abroad rose 2.3 percent in the first two months of the year to US$540 billion, according to a statement from the Chinese General Administration of Customs yesterday. Imports unexpectedly fell 8.4 percent, leaving a record trade surplus of nearly $171 billion.
The median forecasts of economists surveyed by Bloomberg were for exports to rise 5.9 percent and imports to gain 1 percent.
Photo: AFP
The figures offered a glimpse into how the world’s largest trading nation has fared since US President Donald Trump started raising tariffs on Chinese goods. The US imposed a 10 percent levy on almost all imports from China on Feb. 4, then hiked that to 20 percent earlier this week.
“The damage of higher US tariffs on China’s exports will likely show up in next month,” said Zhang Zhiwei (張智威), president and chief economist at Pinpoint Asset Management. “While the tech sector in China is booming, domestic demand is still weak as the property sector downturn has not ended.”
The drop in imports reflects sluggish demand at home and shows how the health of the domestic economy is affecting other nations. Chinese purchases from overseas hit the lowest since 2020.
This week, the government in Beijing announced it would expand the budget deficit as it tries to hit a growth target of 5 percent for this year.
“China’s weaker-than-expected exports in the first two months of 2025 are a bad sign — the impacts of the US tariff hike in February and softening external demand appear to have outweighed front-loading by US importers that we expected to buoy shipments, at least temporarily. The sharp, and surprise, drop in imports shows the economy is weak,” Bloomberg economist Eric Zhu said.
China is highly vulnerable to the risk of a global trade war. Although the US directly absorbs only about 15 percent of Chinese exports, more goods are shipped there through Vietnam, Mexico and other countries.
Companies shipped a record US$87 billion of goods to the 10 countries in the ASEAN bloc in the first two months, with exports to Vietnam the highest on record. Purchases by firms in the EU were also higher than for the same period last year.
Should the US continue to raise tariffs, it could drastically slash an important driver of growth that contributed to almost a third of China’s economic expansion last year. Even at their current levels, Trump’s higher charges might cut into the speed at which China’s exports grow for the rest of the year.
The latest pickup in Chinese shipments to the US shows how the threat of tariffs is pushing companies in both nations to attempt to get goods into the US before the Trump administration increases their costs even further.
Exports to the US rose to almost US$76 billion, the largest in three years for the first two months of the year. Still, it was below the haul in the same period in 2022, when the pandemic drove a massive expansion in bilateral trade.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
Servers that might contain artificial intelligence (AI)-powering Nvidia Corp chips shipped from the US to Singapore ended up in Malaysia, but their actual final destination remains a mystery, Singaporean Minister for Home Affairs and Law K Shanmugam said yesterday. The US is cracking down on exports of advanced semiconductors to China, seeking to retain a competitive edge over the technology. However, Bloomberg News reported in late January that US officials were probing whether Chinese AI firm DeepSeek (深度求索) bought advanced Nvidia semiconductors through third parties in Singapore, skirting Washington’s restrictions. Shanmugam said the route of the chips emerged in the course of an
RSS