China’s exports growth beats expectations in June; imports rebound

China’s exports growth beat expectations in June, buoyed by robust shipments to non-U.S. markets and as a temporary reprieve from U.S. tariffs helped slow the decline in goods sent to America.

Exports jumped 5.8% in June in U.S. dollar terms from a year earlier, customs data showed Monday, exceeding Reuters’ poll estimates of a 5% rise.

Imports climbed 1.1% from a year earlier. While missing economists’ expectations of a 1.3% rise, that marked the first time that imports have grown this year, reversing the trend of declining imports this year amid sluggish domestic demand.

China’s exports to the U.S. dropped for a third month, falling over 16.1% in June, but the decline eased from the prior month amid a tariff truce. Imports in June dropped 15.5%. That compares with a 34% drop in exports in May, and imports decline of 18%.

The county’s shipments to Southeast Asian nations surged 16.8% from a year ago and those to European Union countries jumped 7.6%, according to a CNBC calculation of the official trade data. Imports from these regions were little changed, rising 0.08% and 0.41%, respectively.

In the first half of this year, Chinese overall exports jumped 5.9% from a year earlier, while imports slumped 3.9%, customs data showed, with a trade surplus of $585.96 billion — nearly 35% higher from a year earlier.

Despite the upbeat trade data for the first half of the year, economists forecast the export momentum could falter due to the heightened uncertainty over U.S. tariffs.

“Tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” Zichun Huang, China economist at Capital Economics said in a note Monday.

The rebound in imports is likely due to a lower base for comparison, Huang added, while the trade truce restored some demand for U.S. goods, resulting in a smaller decline in imports from America.

Following the trade data release, China’s benchmark CSI 300 index was up 0.22%.

Ties between the world’s two biggest economies have been on the mend following two days of meeting in London last month, where both sides arrived at a framework to implement the consensus reached earlier in Switzerland. Beijing agreed to resume shipments of rare earths while Washington offered to ease some export restrictions on ethane, chip-design software and jet engine components.

In June, China’s exports of rare earths surged 60.3% from a year earlier to 7,742 tones, up 32% from May, signaling Beijing’s efforts to fulfill its promise as the Aug. 12 deadline approaches for it to reach a durable deal with Washington. Its imports of rare earths, however, fell 13.7% from a year ago.

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