Trade Data Monitor

Author: John Miller

  • Trade Statistics Show Inflation

    Trade Statistics Show Inflation

     AI is Still Driving Trade

    Despite an increase in protectionism and tariffs, global trade has persisted at a steady pace thanks to a boom in sales of new technologies related to artificial intelligence. The war in the Middle East and subsequent energy crisis have only made economies more focused on restructuring in an environmentally friendly way. 

    That’s why the world’s top trade power, China, has continued to ramp up exports. In May, Beijing’s General Administration of Customs said on Tuesday, exports increased 19.4% year-on-year to $376.8 billion. 

    “The war is boosting demand for green exports, such as electric vehicles, batteries, solar products, and AI-related technology goods, which are linked to China’s structural focus,” Sheana Yue, a senior economist at Oxford Economics, wrote in a note. “China, relatively insulated from energy-related cost shocks, retains advantages in scale, supply-chain depth and industrial capacity.” Overall, Exports of high-tech goods increased 51.1% to $112.1 billion.

    Inflation is Starting to Show up in Trade Data

    However, trade data is starting to show another trend that could ruin the party: inflation. Consider this: The number of integrated circuits exported by China increased 2.1% to 30.7 billion. The value of these shipments rose 111% to $35.5 billion, representing, roughly, a doubling of prices over 12 months. 

    Exports of “automatic data processing equipment and parts thereof”, for which there is no data on quantities, rose 66.1% to $26.9 billion. 

    There were price increases across other categories, too. Exports of “unwrought aluminum and aluminum products”, for example, increased 15.6% by quantity but 38.4% by value. Exports of rare earths declined 6.4% by quantity but increased 237% by value. (The total value of rare earths exports, we should point out, amounted only to a paltry $63 million.) The number of mobile phones exported dropped 3.5% to 53.4 million. By value, they increased 44.3% to $9.9 billion. 

    Exports to the U.S. Are Back Up 

    A year ago, the world was in the throes of a U.S.-China trade war. Washington’s tariffs on Chinese imports were over 100%. Twelve months later, the relations have thawed, including a visit by President Trump to Beijing, and commerce between the world’s two trade powerhouses.  Exports to the U.S. increased 35.6% year-on-year to $39 billion. Imports from the U.S. rose 20.2% to $13 billion. 

    Trade with Europe, which had been booming, has stabilized. Exports to the EU increased 7.6% to $53.2 billion, while shipments from the EU shrank 1.3% to $22.6 billion. 

    Those numbers are dwarfed by China’s trade with its Asian neighbors. Exports to ASEAN nations rose 24.7% to $72.6 billion, while imports increased 27.9% to $40.1 billion. Exports to Canada declined 2.6% to $4.6 billion. Imports from Canada increased 98.6% to $7.2 billion. 

    Energy Markets Are Adapting

    The crisis in the Middle East, and the impasse in the Strait of Hormuz has disrupted energy trade. Chinese imports of crude petroleum oil fell 29% to 33.1 million tons while imports of natural gas increased 111.3% to 10.1 million tons. China is the world’s biggest energy importer. The looming shortages of fossil fuels will only help stimulate China’s lucrative electric vehicle trade. Exports of motor vehicles increased 39.3% to $16.7 billion. By number they increased 42.5% to 987,588. “Support should continue from stronger demand for sustainable energy products amid the oil supply squeeze,” HSBC said in a note.

    China is Buying…Asian Tech

    Imports increased 27.5% to $271.3 billion, but analysts cautioned that this doesn’t mean China will start buying as much from the world as the world buys from it. In a word, China is also building out its AI capabilities. “China’s import growth remains mainly a tech story rather than an energy story,” ING wrote in a blog post. That’s why imports from South Korea, ING pointed out, rose 83.4% to $26.7 billion. Imports of high-tech goods, however, rose 46.9% to $96.6 billion.

    Purchases of agricultural products, by comparison, increased only 4% to $20.7 billion, and imports of pharmaceuticals fell 9.3% to $4 billion. 

    But it almost doesn’t matter how much Chinese imports are growing; they are unlikely to outpace the country’s export juggernaut. In May, Beijing’s trade surplus increased to $105.4 billion from $84.8 billion the month before.

  • Is The U.S.-China Trade War Over?

    Is The U.S.-China Trade War Over?

    U.S.-China Summit This Week

    When Presidents Donald Trump and Xi Jinping meet in Beijing, trade, for once, won’t be the primary topic. Among more severe crises in play are the U.S. war with Iran, the rise of artificial intelligence, and China’s desire to annex Taiwan. After the Trump’s imposition of triple-digit tariffs last year, Beijing and Washington agreed to a one-year trade truce in October that imposes tariffs averaging 47% on Chinese exports to the U.S. and around 30% on goods going the other way. 

     China Boosts Exports

    This weekend, China said its exports to the rest of the world had increased 14.1% year-on-year to $359.4 billion. That was a surprisingly strong performance for a Chinese export economy that’s struggled to find its footing this decade. In March, exports increased only 2.5%, and a group of economists recently interviewed by the Wall Street Journal summoned an estimated expansion for April of only 8%. China’s manufacturers had suffered more than most from the conflict in the Middle East and the difficulty navigating the Strait of Hormuz.

    Trade to the U.S. Recovers

    Exports to the U.S. rose 11.4% to $36.8 billion. In the first quarter of 2026, by contrast, shipments to the U.S. dropped 16.3% to $96.7 billion. What’s going on here? In part, it signals a stabilization after the hard dip caused by tariffs a year ago. April 2025 is when Chinese exports to the U.S. really got hit: That month Chinese exports to the U.S. dropped 21.1% to $33 billion. By comparison in March 2025, they increased 8.7% to $40 billion. With a lower baseline, expect Chinese exports to the U.S. to stay flat on increased slightly year-on-year. To be sure, last year, despite the slowdown in trade with the U.S., China set a record with a $1.2 trillion trade surplus. 

    But the April numbers suggest that the U.S. could be losing leverage. Before Trump, the U.S. had imposed some of the lowest tariffs in global economic history, the result of its postwar liberalization philosophy. The U.S. under Trump has used the negotiating power offered by those low tariffs to exact concessions from enemies and friends. Now, however, “China looks to have more leverage,” Capital Economics wrote in a report. “Higher tariffs haven’t stopped China’s exports from continuing to surge over the past year, and Beijing has showed that it is prepared to wait out U.S. pressure.”

    Semiconductors and Cars

    The rest of China’s trading partners gobbled up cars, semiconductors, and other high-tech goods the country is currently manufacturing. Shipments to the European Union increased 13.6% to $53 billion, and sales to ASEAN nations rose 15.4% to $69.5 billion. Exports to Brazil increased 37.1% to $7.8 billion. 

    Exports of “automatic data processing machines and parts thereof” increased 47.7% to $23.8 billion. Shipments of high-tech products spiked 39.3% to $104 billion. Exports of motor vehicles increased 44% to $16.1 billion. By contrast, sales of ag products increased 3.8% to $8.8 billion. 

    China’s Buying

    China’s economy imported $274.6 worth of goods in April, up 25.3% year-on-year, after rising 27.8% in March. The Wall Street Journal economists had predicted a rise of 16%.

    China is importing components for its booming tech industry. Imports of high-tech products rose 42.1% to $95.9 billion. Imports from the EU increased 14.6% to $23 billon, purchases from the U.S. increased 9.4% to $13.7 billion, and shipments from ASEAN countries rose 29.1% to $42.7 billion. Imports from India rose 32.3% to $2.3 billion. But there are signs that the Strait of Hormuz closure is having an impact. Imports of crude petroleum, most of it from the Middle East, dropped 19.9% to 38.5 million tons. Imports of natural gas, from countries like Russia, increased 83.1% to 8.4 million tons.

    As always, when he arrives in Beijing, President Trump will ask China to buy more American goods. With duties already on the board, and courts in the U.S. now limiting his tariff power, the trade war, if not over, has become much harder for the U.S. to fight. 

  • How AI Is Driving Global Trade

    How AI Is Driving Global Trade

    Lower Growth in China 

    In early March, Chinese leadership set their lowest gross domestic product growth target since 1991, forecasting a 4.5% to 5% expansion for its economy in 2026. 

    This week, China reported a 21.8% year-on-year increase in exports for January and February to $656.6 billion. To avoid distorted numbers because of Chinese New Year, the government in Beijing always reports combined trade data for the two months of the year. 

    This big increase handily beat analyst predictions, and, after a modest 6.6% year-on-year bump in December, defied aggressive action by the U.S. to curb commerce with China. 

    Part of the Chinese trade resurgence is due to an intentional strategy by Chinese policymakers to goose exports by cutting prices and finding new markets. Exports to ASEAN countries rose 29.4% to $112.6 billion, while shipments to the EU expanded 27.8% to $101 billion.

    The AI Global Trade Economy

    Another reason for the increase is the booming tech economy based around intense investments in artificial intelligence technology. China’s exports of integrated circuits, a category which includes the semiconductors used to power AI systems, increased 72.6% to $43.3 billion. Imports of those circuits jumped 39.8% to $78.2 billion.

    The AI buildout is happening around the world, and it’s changing the composition of the Chinese tech economy. Suppliers once flocked to China to manufacture finished consumer goods like smartphones. Now, they’re more likely to make electronic and industrial parts in China that then get finished in other countries. That’s why exports of mobile phones dropped 8.3% to $17.1 billion, even as overall shipments of high-tech products rose 26.9% to $167.2 billion. 

    One consumer product China is still dominating: Cars. Chinese exports of motor vehicles kept on vrooming upward, rising 57.9% to 1.5 million units. By value, they increased 67.1% to $27 billion. 

    China’s surplus only appears to be growing, raising the stakes around the world for protectionist policies. In 2025, China ran a record $1.2 trillion surplus. 

    U.S.-China Trade in Flux

    In one respect, the U.S. strategy to restrict trade is working: Exports to the U.S. dropped 11% to $67.2 billion. In February, the Supreme Court ruled that the Trump administration was illegally using an emergency power to apply tariffs on foreign imports. In response, Trump promised to a standard 10% tariff that he will eventually bump up to 15%. That could end up helping China, as it lowers their tariff rate relative to other countries. 

    However, China has been ramping up exports to other countries. Sales to France rose 31.9% to $8.5 billion, exports to Italy leapt 36.4% to $9.9 billion, and shipments to Russia rose 22.7% to $18.3 billion. 

    China has abandoned the low-tech staples of its early economic development, but with so much capacity, there have been occasional resurgence in the manufacture and exports of some categories. Exports of furniture, for example, rose 24.7% to $12.4 billion. However, shipments of toys ticked up only 1.5% to $5.1 billion. 

    The Importance of the Chinese Consumer

    Despite the low growth expectations, total imports increased 19.8% to $443 billion. China’s consumers have more appetite, and money, for purchasing foreign goods. Policymakers in Beijing have been focused on getting consumers in China to spend and invest more. At the same time, exporting manufacturers need raw materials and parts for making their goods. Imports of high-tech products increased 27.7% to $139.8 billion. 

    One thing is certain: They’re not buying American. Imports from the U.S. fell 26.7% to $19.4 billon. Trump is due to visit China at the end of March. 

    By comparison, imports from the European Union increased 11.7% to $41.2 billion, and purchases from ASEAN nations rose 12.9% to $63.9 billion. One region increasingly benefitted from China’s importing strategy is Latin America. Imports, mostly of commodities like copper, iron ore, and soybeans, jumped 28.9% to $46.5 billion. Notably, imports from France rose 28.2% to $6.1 billion, and imports from Russia increased 4.1% to $20.8 billion. 

    One item China will likely have to import more of is petroleum, as the war in Iran scrambles supply routes around the Strait of Hormuz. In the first two months, China hiked imports of crude 15.8% to 96.9 million tons. 

  • Global Trade is Moving On — Without the U.S.

    Global Trade is Moving On — Without the U.S.

    One way of looking at China’s trade economy in December and for the full 2025 year is its export surge, amplified by a weak currency, deflation at home, and inflation in most of the rest of the world. China pumped up total monthly exports 6.6% to $357.8 billion in December from $335.6 billion over the same period in 2024. 

    Here’s another angle: Washington’s efforts to crimp Beijing’s industrial sector have resulted in diminished U.S.-China trade, but even bigger Chinese surpluses with the rest of the world, and evolutions in global trade that are simply leaving America behind. For the full year, China exported $3.8 trillion worth of goods. Minus imports, that made for a total surplus of $1.19 trillion, the biggest in recorded economic history. 

    Chinese officials themselves have drawn direct links between U.S. policy and its surplus, saying in effect that without tariffs, Beijing would have bought more goods from the rest of the world. “Some countries have politicized economic and trade issues and restricted exports of high-tech products to China for various reasons; otherwise, we would have imported even more,” Wang Jun, a Chinese trade official, told reporters Wednesday. 

    According to the Petersen Institute for international economics, U.S. tariffs on Chinese exports average around 47%, while China’s average tariffs on US exports are around 32%.

    The Chinese export juggernaut needs markets like nature abhors a vacuum, and it’s found new landing places for its voluminous container ships. Exports to the European Union increased 11.5% in December to $51.9 billion. Exports to Germany increased 13% to $11 billion. By comparison, exports to the U.S. fell 30.2% to $34.2 billon. We are seeing the wheels of human economic history turn in real time. Global trade is still inching upward every year. The rest of the world is getting on with it, leaving the U.S. behind. While ports on the East and West coasts slow their activity, they’re busy in Asia, Europe, Latin America and Africa. Exports to ASEAN nations increased 11.3% to $66.4 billion, including a 20.4% jump to Vietnam to $18.9 billion; shipments to Latin America rose 9.8% to $25.7 billion; and sales to India increased 22.1% to $12.8 billion.  

    The story of global trade right now is geopolitics. It’s the jolt of the U.S. away from its post-war free trade consensus. There is another story we’ve discussed here that is less surprising but still ongoing. It’s the move of China and other Asian countries up the value chain, away from toys and shoes and into tech and cars. At the same time, countries like Egypt, Bangladesh and Cambodia continue to build up their apparel and textile exports. 

    In December, Chinese exports of high-tech products increased 16.7% to $93.7 billion. Sales of motor vehicles increased 73.2% to 994,000. By value, they rose 71.7% to $17.1 billion. Exports of toys fell 19.4% to $2.7 billion. Shipments of footwear dropped 17.4% to $3.9 billion. 

    On the import side, China ramped up purchases 5.7% to $243.6 billion from $230.5 billion. The relationship with the EU seems more two-sided than in the past. Imports from the EU rose 17.9% to $26.9 billion, while purchases from the U.S. plummeted 28.6% to $10.9 billion. Imports from Germany increased 13.6% to $8.9 billion. Imports from Latin America increased 26.8% to $24.4 billion. Imports from India rose 56.5% to $2.2 billion.

    Buying more from Europe and Latin America was also at the expense of some Asian neighbors. Imports from ASEAN countries fell 5.1% to $35.7 billion. Even imports from Vietnam were flat at $9.5 billion. 

    Imports of high-tech products rose 13.6% to $82.6 billion. Purchases of soybeans increased 4.7% to $3.9 billion. China still needs a protein supply, and it’s getting it from Brazil instead of the U.S.

    One sign the Chinese economy is doing just fine: China ramped up purchases of natural resources. It increased quantities of imports of iron ore by 6.5%, copper 7.3%, coal 11.9%, oil 17.4%, and natural gas 90.2%.

  • TDM’s Top 10 Trade Trends to Watch in 2026

    TDM’s Top 10 Trade Trends to Watch in 2026

    Happy New Year. While we wait on the Supreme Court to rule whether the Trump administration is entitled to apply tariffs on national security grounds, global trade grinds on. We at Trade Data Monitor are paying attention to what’s happening via the prism of official trade statistics. It’s a radically different world than when I started covering trade for the Wall Street Journal 20 years ago. The biggest story is still in tech, where the economy is being transformed by investment in chips and other electronics used to make artificial intelligence systems. Shut out of the U.S., many Chinese exporters are finding new markets in Europe. Beijing is not giving up its export-dependent growth model, which in 2025 propelled the world’s first-ever trillion-dollar trade surplus. Via our system for reverse engineering trade data, we can discern that Russia’s import demand is shrinking. Vietnam is still climbing the economic ladder, thanks to an export portfolio that includes staples like toys and shoes, but also high-value electronics. Most of the world has not given up on trade. In October, global container volumes increased 2.1%. However, the U.S. is an outlier. According to Bloomberg, the U.S. saw an 8% contraction in inbound shipments. Although President Trump threatened much higher levies, the U.S. effective tariff rate is “only” around 15%. That’s its highest level since the 1930s, and it’s the main reason the WTO is now forecasting 0.5% growth in global trade in 2026, instead of 1.8%.Here are our top trade trends to watch in 2026.
    1.   The Asian Chip MiracleThe chip market is expected to reach around $750 billion in 2026 and hit $2 trillion by the early 2030s. In its latest incarnation that trend is being led by Asia. Eight of the world’s top 10 exporters of chips, classified under HS8541 and HS8542 are Asian. Only the U.S. and Germany crack the top 10. 
    Thanks in part to the chip industry, and parallel industries in batteries, engines and electronics, the electric vehicle industry is thriving. Slowly, the world’s road and filling stations are being rewired. In country after country, electric car imports have been increasing.  One consequence is booming trade in the critical minerals, like cobalt, manganese and nickel, needed to build electric cars and batteries. We’ll explore that trade in our February newsletter. 
    2.   China Finding Markets in EuropeWith the U.S. throwing up roadblocks, Chinese exporters have been finding markets in Europe. That’s triggered a crisis for European domestic manufacturers, who are now having to compete with the China price Americans have turned down.
    3.   Where is U.S.-China Trade Headed?The future of the U.S.-China trade relationship seems uncertain at best. When we added up total trade between the two behemoths, the only sector has grew in 2025 was aircraft. The U.S. shipped $12.5 billion of aircraft and aircraft parts to China in the first nine months of 2025, up 45% from the same period in 2024.
    4.   How Vietnam is Winning Global TradeAt TDM, we’ve been talking about Vietnam’s promise for a decade, so we’re not surprised to see its strong export numbers. The remarkable thing about Vietnam isn’t that it has become an export machine, it’s that its manufacturing capacity has increased across so broad a base. 5.   Russia’s Shrinking Import DemandRussia still isn’t publishing trade statistics, but thanks to the breadth of TDM’s database, we can look at which countries are shipping to Russia. Those exports to Russia are mostly shrinking, an indication of the battering Russia has been taking from the war. The IMF and other institutions predict Russian GDP growth of only around 1% in 2026. 
     6.   U.S. Imports from MexicoThe biggest beneficiary of the U.S.’s trade war with China has been Mexico. Although the two countries, and Canada, are now renegotiating the USMCA, businesses have had confidence they can manufacture in Mexico and ship north. Mexico has been suppressing data, but U.S. import statistics paint a picture.
    7.   Indian ExportsNow with the world’s biggest population, India has now overtaken Japan as the world’s fourth biggest economy, behind the U.S., China and Germany. Its top market: the U.S., followed by UAE and the Netherlands. 
    8.   Trade Case Study: EgyptTrade coverage focuses on the big countries, but we’ve been studying smaller players, and one interesting case study is Egypt. It’s been boosting apparel exports, a sign of a country’s increasing prosperity and competitiveness on export markets. In 2025, Egypt clocked the biggest increase in apparel exports, shipping out $2.6 billion in the first nine months of 2025, 30.7% more than the year before. The second highest increase was registered by Cambodia at 16.9%, and no other country improved by double digits. 9.   What States’ Ports and Economies Are Thriving MostAmerica is a huge continental economy with dozens of distinct economic regions and sea- and airports. We sorted every state by increase year-on-year in exports from the place it’s leaving the U.S., over the first nine months of 2025. Texas and California are still the biggest exporters overall, but New York leads the race in year-on, because of its trade in physical gold. Arizona ranks second because of its electronics trade with Mexico. Third is Indiana, thanks to its exports of hormones to Italy. 10.   U.S. Wine ExportsA retaliatory tariff and a “Buy Canadian” movement have dented U.S. wine exports to its northern neighbor. Instead, U.S. producers are finding replacement markets in Germany, South Africa and Japan. 
    5 News Stories To Understand This Moment in Global Trade 📰
      
    WSJ: A Shrimper, a Carmaker, a Lawyer: How the World Tackled Trump’s Trade War: A fascinating mini-survey of how businesses around the world are being impacted by tariffs.Euronews: In 2025, global trade cracked as Europe hurt by US tariffs and new China shock: An important perspective, from Europe, on how trade flows have been rerouted toward the Old World. Global Trade: U.S. Tariffs to Cost Container Carriers $.2 billion by 2026, Alphaliner Warns: The U.S. isn’t just imposing tariffs on goods, it’s putting duties on ships. AP: Trump launched global tariff wars in 2025. Here’s a recap of his trade actions this year: A useful recap of U.S. trade duties in 2025. BBC: Peru’s ‘fast and furious’ blueberry boom: An optimistic story about global trade, chronicling how Peru has become the world’s biggest blueberry exporter.
    What We’re Reading 📚
      With tariffs still beating down optimism over global trade, it’s easy to get dragged down by the political story of modern commerce. What’s lost is the triumph of human ingenuity represented by the global logistics industry figuring out how to move goods from any place in the world to any other place. My former Wall Street Journalcolleague Christopher Mims tells that story in his 2021 book Arriving Today: From Factory to Front Door—Why Everything Has Changed About How and What We Buy. In an illustrative anecdote, Mims tells the story of a USB charger. After leaving a factory in Vietnam, Mims recounts, the charger “has traveled more than 14,000 miles, across 12 times zones, by truck, barge, crane, container ship, crane, and truck again, all before it trundled down a few hundred yards of conveyor, flitted about on the back of a robot, and was ferried again on, all told, miles more conveyor and at least two more trucks, before being hand-carried to someone’s front door.”

  • Chinese Exports Down 1.1% in October

    Chinese Exports Down 1.1% in October

    The Chinese export juggernaut finally started to show the impact of protectionism and weaker Western consumer markets in October. 

    A week after Presidents Trump and Xi settled a new trade deal that cut tariffs and put off their trade war for a year, China reported a 1.1% year-on-year drop in exports to $305.3 billion. 

    To be sure, this is only one month. China has shown resiliency thus far in 2025, finding other markets as Washington puts up obstacles to its exports. Shipments to the U.S. have declining since the spring. In October, exports to the U.S. fell 25.1% year-on-year to $34.9 billion. But sale to the European Union, especially Germany and France, had been holding steady. In October, surprisingly, they rose only 1%, to $43.9 billion.

    Analysts had predicted a 3% overall increase in exports, meaning that China missed its target by 4 percentage points. 

    Much of the recent analysis has focused on protectionist trade policies driven by populist politics. Although they have caused headaches for businesses by creating a climate of uncertainty, real tariffs have been lower than headline duties. Instead, a big part of the leveling off of Chinese exports has been caused by a change in its export composition, and in consumer demand in the U.S. and Europe. That’s why there’s been dramatic drops in shipments of consumer goods where China used to dominate. In October, for example, toy exports fell a whopping 31% to $2.5 billion. Shoe sales dropped 20.9% to $2.7 billion. Suitcase exports declined 25.7% to $2.1 billion. It’s not just the low-tech stuff. The number of mobile phones shipped dropped 14.2% to 70.6 million. Exports of high-tech products increased a modest 1.8% to $83 billion. 

    Meanwhile, China is dominating new markets, especially in the automotive sector. Car shipments boomed again in October, rising 34.1% year-on-year to $14.3 billion. In Europe and the U.S., China still has to contend with strong domestic manufacturers. These exports tend to go elsewhere. China’s top 10 car markets so far this year: UAE, Russia, Belgium, UK, Mexico, Australia, Brazil, Saudi Arabia, Spain, Kazakhstan.  

    The bright spots: In October, shipments to ASEAN nations rose 11.1% to $53.3 billon; exports to Vietnam increased 22.4% to $16.6 billion. Exports to Africa rose 9.4% to $17.7 billion. Exports to Latin America increased 2.2% to $24.1 billion. Exports to Russia, however, plummeted 22.5% to $8.5 billion. 

    The slowdown in trade poses a challenge for Chinese policymakers. “As exports rapidly lose steam and retail sales show signs of deterioration, we see increasing pressure on Beijing to step up policy support to stabilize growth” until the end of 2025, Nomura wrote in a note.

    Domestically, there are certainly questions. 

    In October, imports rose only 1% to $215.3 billion, raising questions about domestic demand. Imports of agricultural products rose 7.1% to $17.2 billion. Purchases of high-tech products rose by 3.1% to $69.9 billion. 

    Imports from the U.S. declined 22.5% to $10.2 billion. Imports from the EU rose 4% to $22.1 billion. Imports from ASEAN countries fell 4.6% to $32.5 billion. Purchases from Africa increased 5.4% to $9.7 billion. Imports from Latin America, goosed by soybean sales, were up 15.1% to $21.5 billion. Imports from Russia rose 0.9% to $11 billion. 

    Beijing has reported GDP growth of 5.2% over the first nine months of the year, and seems on track to hit the government’s 5% goal for the year. 

    One good sign is the country’s appetite for industrial commodities: Imports of copper and iron ore rose year-on-year in October, as did purchases of natural gas and crude oil. Imports of coal continued to fall sharply.

  • Casualties of the U.S.-China Trade War: 36 Million Phones

    Casualties of the U.S.-China Trade War: 36 Million Phones

    Please Dial a New Number 

    As U.S. and Chinese negotiators try to find a way out of tariff gridlock, one thing is certain: The smartphone supply chain has shifted significantly, upending the practices and expectations of manufacturers, logistics firms, and retailers.  

    China’s exports of mobile phone fell 11.6% year-on-year in August to 60.8 million sets. In dollar terms, they declined 18.9% to $6.8 billion. For the first eight months of 2025, Chinese exports of mobile phones dropped 11.5% to $64.1 billion. The number of sets shipped shrank 7.2% to 462.5 million. 

    That’s 36 million fewer phones. 

    It’s no mystery where the capacity has shifted. In the first seven months of 2025, the U.S. has boosted smartphone imports 201.7% from India to $13.2 billion, and 170.9% from Vietnam to $3.5 billion. 

    Chinese Export Growth Slows

    Overall, total Chinese exports rose 4.4% in August to $321.8 billion, below a forecast around 5% and after increasing 7.2% in July. Shipments to the U.S. fell 33.1% to $31.6 billion. Washington currently has tariffs of around 55% on most Chinese exports, while Beijing has duties of around 30% on U.S. goods. Trade diplomats from each country have given themselves two more months to negotiate. 

    Meanwhile, China has been increasing exports elsewhere. Exports to the European Union rose 10.4% in August to $51.7 billion. Shipments to ASEAN nations rose 22.8% to $57.1 billion. Exports to Vietnam increased 31.2% to $17.6 billion. Sales to Africa increased 26% to $18.6 billion. Shipments to India increased 9.2% to $12.5 billion. 

    To be sure, there’s only so much more those countries can absorb, and analysts expect exports to level off. “With the temporary boost from the U.S.-China trade truce fading and the U.S. raising tariffs on shipments rerouted via other countries, exports are likely to come under pressure in the near term,” Zichun Huang, China of Capital Economics wrote in a note. The U.S. has been concerned about transshipment and is implementing penalties for goods it believes originate in China.

    One country already buying less from China is Russia. Chinese exports to the warring nation fell 16.6% to $8.5 billion. So far this year, exports to Russia have fallen 9.7% to $64.8 billion. 

    Buying More Soybeans

    The U.S. has been pushing China to buy more soybeans. In August, soybean imports increased 1.1% by quantity to 12.3 million tons, but fell 8.6% by value to $5.5 billion. Imports of agricultural products declined 2.9% in August to $18.7 billion. Grain exports increased 7.1% to 217,816 tons but because of falling prices fell 11% by dollar value to $102 million. Overall, exports of agricultural products fell 3.8% to $8.1 billion.

    Rare Earth Exports Rise 

    Washington has also been lobbying for easier trade in rare earths minerals. Exports of rare earths increased 34.6% in August to $55 million. By quantity, they increased 22.6% to 5.791.8 tons. Exports of high-tech products increased 9% to $79.3 billion. Sales of China’s manufacturing staples continued their long, slow fall. Exports of footwear declined 17.1% to $3.3 billion, sales of toys fell 20.9% to $3.2 billion, and shipments of household appliances dropped 6.6% to $8.4 billion. 

    China’s Long-Term Cut in Imports

    Total Chinese imports increased 1.3% to $219.5 billion, as the country stabilizes as more of a self-sustaining market. Imports were down 6% from $233.4 billion in August 2022. In the first seven months of 2025, China reduced imports 2.2% to $1.7 trillion. 

    China is buying less from all its trading partners. In August, imports from the European Union fell 1.8% to $22.8 billion, purchases from the U.S. declined 15.8% to $11.3 billion, and shipments from ASEAN countries fell 3.8% to $32.8 billion. Imports from Africa declined 6.9% to $9.6 billion. Imports from Russia dropped 18.7% to $9.4 billion. 

    There were some exceptions: Imports from Vietnam rose 4.6% to $8.9 billion, and purchases from India rose 16.2% to $1.5 billion, a relatively small number. Imports of high-tech products rose 3.5% to $67.3 billion. 

    To be sure, even as it buys more of what it produces, China still needs raw materials. Imports of copper ore and concentrates increased 7.4% to 2.8 million tons. However, China continued to cut its coal imports: Purchases of the black rock dropped 6.7% to 42.7 million tons.

  • Global Coal Trade is Finally Faltering

    Global Coal Trade is Finally Faltering

    China Cuts Coal Imports

    For years, as governments around the world embraced clean energy technology, coal trade held steady because China was still buying. As the rest of the world turned away from coal, China boosted imports to power its booming electrification, and a vibrant new industry of electric vehicles and batteries. In 2024, it imported 352.2 million metric tons of coal, up 79% from 197 million in 2019. 

    This year, China is finally giving up the rock. In July, its purchases of coal dropped 22.9% year-on-year by volume to 35.6 million tons, while boosting imports of other energy sources. Imports of natural gas rose 82.4% to 10.6 million tons, and imports of crude petroleum oil increased 11.5% to 47.2 million tons.

    China diminished imports from its top sources: Russia, Australia, Mongolia and Indonesia. The only country it increased coal imports from was Canada, boosting imports 13.3% to 5.4 million tons. 

    So what is going on? China has been producing more coal domestically and also developing more alternative energy sources such as wind and solar. It’s also transforming its economy to become less dependent on global trade, by ramping up production in assets like coal, where it has abundant resources. Exports of fertilizers rose 134.5% to $2.1 billion, and exports of agricultural products increased 1.6% to $8.4 billion.

    Adjusting to U.S. Tariffs

    The switch is just one of the ways China has been adjusting to duties from its biggest export market. How the world adapts to a newly protectionist U.S. is one of the most important economic stories of the decade. On Thursday, August, 7, Washington slapped duties from 10% to 41% on hundreds of billions worth of imports from dozens of countries. 

    Also on Thursday, China said its overall goods exports increased 7.2% in July to $321.8 billion, surpassing the expectations of analysts who’d predicted growth of around 6%. Exports to the U.S., however, fell 21.6% to $35.8 billion, while imports from the U.S. shrank 18.6% to $12.1 billion. 

    Current U.S. tariffs on Chinese imports vary, but are generally around 45%. The U.S. has also eliminated the de minimis exemption, which allowed companies to ship goods worth under $800 into the U.S. tariff free. 

    Negotiators from Washington and Beijing are currently negotiating a new agreement governing tariffs between the two countries. The two sides have set an August 12 deadline, after which they’ve threatened to impose duties of over 100%, which would cripple trade between the world’s dominant trading economies.

    Destination Europe

    One surprising development has been how much China has managed to redirect its exports into the European Union. Officials from Brussels visited Beijing last month. Shipments into the EU increased 9.3% in July to $50 billion, even as imports from the EU declined 1.4% to 24.5 billion. 

    Less surprisingly, exports to ASEAN nations rose 16.8% to $54.6 billion, led by shipments to Vietnam increased 28.1% to $17.1 billion. Imports from ASEAN nations fell 5.4% to $31.4 billion. Exports to Russia continued their decline, falling 9% to $9.1 billion. 

    Supply Chains or Domestic Demand?

    China’s total imports rose 4.1% in July to $223.5 billion. The increase in imports was driven by increases in commodity shipments from Africa, up 20.3% to $10.6 billion, Latin America, up 12% to $22.1 billion, and India, 26.4% to $1.7 billion. 

    Just as the new American dream appears to be a self-contained continental market, so it goes for China. It’s now a country that makes everything. All it needs is raw materials. Imports of agricultural products rose 5.4% to $18.7 billion. One essential question is how much the trade is focused on supplying the domestic market, and how much is part of global manufacturing supply chains. 

    Phone and Cars

    Shipments of high-tech products rose 4.3% to $78.1 billion. Exports of mobile phones, however, fell 21.8% to $7.5 billion, signaling that China could losing one of the mainstays of its export economy. In the first half of 2025, the U.S. cut smartphone imports from China 27.6% to $11.2 billion from tripling them from India to $11.6 billion. That might change as President Trump moves to slap duties on India. Imports of high-tech products rose 7.9% to $71.9 billion, and exports of chips and integrated circuits increased 29.4% to $17.9 billion. 

    When it comes to cars, China has already become a country that makes way more than it takes. Exports of motor vehicles rose 18.5% to $11.8 billion. Imports of motor vehicles dropped 42.1% to $2.5 billion. 

    Toy sales fell 3.2% to $3.5 billion. 

  • China Ramps Up Exports to Vietnam Amid Transshipment Worries

    China Ramps Up Exports to Vietnam Amid Transshipment Worries

    Made in Vietnam (or China)

    At a time when trade officials around the world are closely watching Vietnam’s evolving place in the global trading system, Chinese exports to the new Asian economic power in June boomed 23.8% year-on-year to $16.3 billion.

    The U.S.-China trade war has pushed attention of U.S. trade negotiators toward manufacturing powers such as Vietnam, Singapore and Malaysia. 

    Vietnam has had a trade deal with the U.S. for over 20 years. The country is now the U.S.’s sixth biggest source of imports, after Mexico, Canada, China, Ireland, and Switzerland. Vietnam is actually the fifth biggest source if you take away gold shipments from Switzerland. 

    Earlier this month, President Trump announced a new trade deal with Vietnam that includes 20% tariffs on U.S. imports from the Asian country. With one exception: 40% tariffs on imports from Vietnam that are “transshipped” from China. That set off an effort by Vietnamese trade officials to certify which goods made in their country are in fact domestic and not repackaged Chinese fare. 

    With shipments from China increasing so fast, they’ll have their work cut out for them, especially as the economic relationship appears to be growing more one-sided: China’s imports from Vietnam in June shrank 13.4% year-on-year to $7.6 billion. 

    China’s Resilient Export Economy

    The pressure of the trade war with the U.S. shows no signs of abating. Chinese negotiators now face an August 12 deadline to set new trade terms with the U.S.

    Overall, Chinese exports in June rose 5.8% year-on-year to $325.2 billion. Beijing is successfully weathering the storm: Current duties on Chinese imports vary by product but are at an average of around 55%, according to a recent social media post by President Trump. 

    Exports to the U.S. fell 16.1% to $38.2 billion. However, that decline was lower than the fall in May, and it’s been counterbalanced by an increase in sales to other countries. 

    The rebound in trade with Europe appears significant. Exports to the European Union rose 7.6% to $49.2 billion. Shipments to Germany increased 3.6% to $10.1 billion. Exports to Italy and France both rose by double-digit figures. European countries stand to benefit from the loss of export markets in the U.S. Buyers there can snap up excess production that can’t find a home in the U.S., and benefit from lower prices.

    Exports to Africa leapt 34.9% to $19.6 billion. Exports to ASEAN countries improved 17% to $58.2 billion. Exports to Brazil fell 8% to $6.1 billion. 

    The Russia Relationship

    After Russia invaded Ukraine in 2022, Beijing and Moscow forged a close trade relationship, but that appears to be crumbling. Russia shipped raw materials to China, and bought electronics, especially for the war effort. But in June, exports to Russia declined 16.2% year-on-year to $8.3 billion. Imports from Russia fell 11.2% to $9.3 billion. To be sure, a big part of the decline can be attributed to the struggles of Russia’s economy.

    Cars, Not Phones

    China’s main casualty of the trade war might be smartphones. Exports of mobile phones fell 8.8% to $7.4 billion. However, overall exports of high-tech products rose 7.3% to $78.1 billion. The Chinese export economy appears increasingly geared toward high-tech industrial goods, especially cars. Exports of motor vehicles increased 23% to $10.8 billion. Exports of ships leapt 23.7% to $4.5 billion. Shipments of agricultural products declined 6.2% to $8.1 billion. Exports of suitcases, textiles and footwear all continued their decline.   

    The Chinese Economy 

    Concerns remain about Chinese demand and the country’s domestic economy. In June, total imports increased only 1% year-on-year to $210.4 billion. 

    Imports from the U.S. fell 14.8% to $11.6 billion. Imports from the EU, however, notched up 0.6% to $23.3 billion, another sign of Brussels taking a different tack toward China than Washington. Imports of agricultural products increased 2% to $18.5 billon. Imports of high-tech products increased 10% to $67.7 billion. Imports of integrated circuits rose 11.6% to $34.6 billion. Although purchases of crude petroleum and natural gas increased, imports of coal fell 25.8% to 33 million tons. 

    And, despite the success so far in withstanding pressure from the U.S., the Chinese economy will keep taking punches from the trade war. “Tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” wrote Capital Economics in a note. “We therefore expect export growth to slow over the coming quarters, weighing on economic growth.” 

  • Chinese Demand Falters as Imports Decline

    Chinese Demand Falters as Imports Decline

    Trade in a Time of Geopolitical Adjustment

    The focus of the global trade world is, rightly, on President-elect Donald Trump and the U.S. debating and deciding how far they’ll go in enacting new protectionist measures.

    But an issue that could upend geopolitics — with unintended consequences that will affect big issues like war and peace, migration, and supply chains — just as much is what appears to be a crumbling in Chinese domestic demand. 

    In a time of geopolitical shifting and adjustments, it’s one of the key factors to watch. In the first six months of 2024, according to TDM, China was the world’s second largest importer, shipping in $1.3 trillion worth of goods, behind only the U.S. at $1.6 trillion, and followed by Germany, the Netherlands, and the UK. (France, Japan, India, South Korea and Italy round out the top ten.)

    In November, total Chinese imports fell 3.9% to $214.9 billion from $223.6 billion a year ago.

    What Will Happen to Chinese Demand?

    Almost certainly knowing these numbers were coming, Beijing on Monday said it would unroll an “appropriately loose” monetary policy in 2025. That would be its first unwinding in almost 15 years. The goal will be to increase demand domestically and goose consumer consumption, according to government officials. Beijing also plans to give more subsidies, and even hand out consumer vouchers. China would embrace “the principle of pursuing progress while maintaining stability,” state news agency Xinhua said.

    The declines spanned the globe. Imports from the EU fell 6.5% to $21.7 billion. Imports from the U.S. dropped 11.3% to $12.4 billion. Imports from ASEAN countries declined 2.5% to $33.6 billion.

    In November, imports of agricultural products fell 15% year-on-year to $15.8 billion. Purchases of grain fell 35.7% to $4.3 billion. Imports of motor vehicles plummeted 28.9% to $3.3 billion. China’s preliminary monthly trade report doesn’t break out consumer goods in much detail, but some products offer hints of consumer confidence.  Imports of cosmetics and clean-care products, for example, dropped 8.3% to $1.2 billion.

    Et Tu, Electronics?

    One sector of global trade that had expected to survive the coming choppy waters is consumer electronics. There will surely be more curbs like those enacted by the U.S. on sales of chips, but in general the supply chains needed to produce iPhones and laptops is meant to endure. But here, too, there are signs of weakening. In November, Chinese imports of high-tech products rose only 2.6% to $64.7 billion. Imports of copper ore and concentrates, a key ingredient in making electronics, fell 8.1% to 2.2 million tons. 

    The Rest of the World

    China’s export picture was a little better in November, although there was still some softening, because of new tariffs and sluggish demand. Shipments of agricultural products rose 7.4% to $9.8 billion. Exports of high-tech products increased 6.5% to $81.8 billion. Exports of toys rose 4.9% to $3.1 billion. Some of these shipments were ordered over the summer as it became clear that Trump might win a second term to the White House. We’re likely to see a lot more of that in December and January, say analysts. 

    Total Chinese exports increased 6.7% year-on-year to $312.3 billion in November 2024 from $292.6 billion the year before. The forecast by analysts had been around 8.5%, and that was a drop from a 12.7% increase in October. Exports to the European Union rose 6.7% to $41.1 billion. Exports to ASEAN countries rose 14.7% to $53.7 billion. Exports to the U.S. rose 7.3% to $47.3 billion. Exports to Vietnam rose 12.3% to $14.5 billion.

    To be sure, factories in China have been affected by general sluggish in consumer confidence around the world. Sales of shoes dropped 1.9% to $3.8 billion. Exports of mobile phones slipped 0.3% to $16.9 billion. Even exports of motor vehicles, a staple of Chinese export success, dropped 7.7% to $9.1 billion. The U.S., EU, and Canada have all slapped duties on imports of Chinese electric vehicles. 

    John W. Miller

  • Trump Election Gooses Trade– Before Tariffs Hit

    Trump Election Gooses Trade– Before Tariffs Hit

    This week’s election of Donald Trump as the U.S.’s 47th president is almost certainly likely to lead to another trade war with China, and further tariffs on American imports. During the campaign, Trump said his favorite word was tariff and floated a universal 10% tariff and specific duties on Chinese imports as high as 60%.

    If applied, the levies would jack up average tariffs to 17.7%, America’s highest rate since 1934, during the Great Depression, according to the Tax Foundation, representing a sharp turn toward deglobalization, and a potential deflation of China’s powerful export economy. 

    The affirmation of Trump’s election this week will accelerate a trend international manufacturers and purchasers worried about the risk of tariffs have already set in motion—increased exports, especially from China to the U.S. and Europe, before the tariffs hit sometime during the course of next year.

    In October, China increased its overall outbound shipments a whopping 12.7% year-on-year to $309.1 billion, their briskest pace in more than two years. At the same time, imports declined 2.3% to $213.3 billion. The lackluster import figures point to potential weaknesses China’s domestic economy.

    That makes taking advantage of current trade terms with the U.S., China’s number one export market, even more urgent. Exports to the U.S. increased 8.1% in October to $46.7 billion. Interestingly, imports from the U.S. grew 6.6% to $13.2 billion, making it one of the only regions to increase exports to China in October. Beijing is almost certain to retaliate next year with tariffs on U.S. imports, kicking off a new, heightened trade war. “Trump’s return could create a short-term boost to Chinese exports as U.S. importers increase their purchases to get ahead of tariffs,” wrote Zichun Huang of Capital Economics in a research note.

    The U.S., of course, is not the only economic power ramping up protectionism. This year, the European Union and Canada also imposed tariffs on imports of Chinese electric vehicles. Officials in those jurisdictions are expected to further hike duties, heightening the urgency of making shipments. Exports to the European Union rose 12.6% to $43.5 billion, while imports from the EU fell 6.1% to $21.3 billion. Overall, China exports around a trillion dollars of goods annually, roughly 30% of its overall exports, to the U.S. and Europe. 

    In October, Chinese exports rose across the board for all kinds of goods. Shipments of agricultural products rose 11% to $9.2 billion. Sales of high-tech products increased 9.3% to $81.6 billion. Exports of toys rose 4.1% to $3.7 billion. Exports of motor vehicles grew 4% to $10.7 billion. A couple exceptions: shipments of mobile phones declined 0.4% to $18.6 billion, and sales of footwear fell 1.1% to $3.4 billion.

    With trading partner after trading partner, China ramped up its trade surplus. Exports to ASEAN nations, which are part of a new Asian supply chain network, increased 16.2% to $48 billion, while imports fell 7% to $34 billion. Exports to Africa increased 21.1% to $16 billion, while imports shrank 8.2% to $9.2 billion. Exports to Russia increased 26.7% to $11 billon, part of an integration of the two massive economies since Russia invaded Ukraine. Imports, however, fell 3.9% to $10.8 billion. Exports to Latin America increased 23.1% to $23.6 billion, while imports fell 10.4% to $18.6 billion

    Imports of ag products fell 4.9% to $16 billion. Shipments to China of high-tech products rose 9.1% to $67.9 billion. Imports of natural gas rose 27.1% to $5.4 billion. Imports of coal rose 14.4% to $4.1 billion. 

    This week, Beijing is set to announce a new package of stimulus measures. One sign it might need it: It is the world’s number one energy importer, and in October Imports of oil dropped 25.3% year-on-year to $24.3 billion by value and 8.7% by quantity to 44.7 million tons.

    John W. Miller

  • It’s a Good Summer for Trade But China Ag Imports Fell In July

    It’s a Good Summer for Trade But China Ag Imports Fell In July


    During a summer that’s been a boon for free trade despite a looming escalation in trade wars, and the possibility of a second Trump administration, China’s agricultural imports dropped 4.9% year-on-year in July to $17.8 billion. 

    The trend reflects China’s regulatory practices, strategic protectionism, and shifting demographics. China has blocked some U.S. beef imports because of a prohibited feed additive, the sector is a favorite avenue of retaliatory actions, and the country’s population has recently started to contract. Purchases of meat fell 32.1% to $1.8 billion. Imports of fresh or dried fruit declined 20.4% to $1.1 billion. Imports of grain and soybeans both rose a few percentage points by quantity but fell around ten percentage points by value. Agricultural exports increased 1.9% to $8.3 billion.

    Overall China’s exports rose 7% year-on-year in July to $300.6 billion, while imports increased 7.2% to $215.9 billion. The strong trade figures surprised many observers. The U.S. and European economies have been surprisingly resilient in 2024, and inflation has been waning. Another factor: Purchasing managers are stocking up in anticipation of punitive trade actions. The EU last month imposed temporary tariffs of up to 37.6% on imports of electric vehicles from China. It’s expected to make them permanent this fall. The U.S. is preparing tariffs on a host of Chinese high-tech goods. Vincent Clerc, the CEO of shipping giant AP-Moeller-Maersk, told the Financial Times that their customers were “bringing orders forward” because “of the potential for a trade war, people would rather have Christmas goods already in the warehouse.”

    Demand in Western markets appears strong despite the risk of economic recession spotlighted by Monday’s stock market hiccup. Exports to the EU increased 8.4% to $45.8 billion, while shipments to the U.S. increased 8.2% to $45.8 billion. By comparison, exports to ASEAN countries increased 12.5% to $46.9 billion.

    However, there are signs that consumers around the world are feeling less prone to spending money in their pockets than they were during the heady days of Covid stimulus payments. Exports of furniture dropped 5% to $4.7 billion. Shipments of suitcases increased 5.2% by quantity to 311,145 Tons but fell 11.1% by value to $2.7 billion. Shipments of toys fell 3.6% to $3.7 billion. The same demographic crunch that could pose a risk to China’s appetite for agricultural products is likely in the long run to hurt China’s competitive advantage in manufacturing these low-tech products. Labor is likely to get squeezed, especially as the country capitalizes on its growing edge in high-tech goods, include solar panels and electric vehicles. 

    Despite the moves by U.S. and European policymakers to levy tariffs on Chinese imports, the country’s high-tech sector is still strong. Exports of motor vehicles increased 13.8% to $10 billion, while shipments of high-tech products rose 12.1% to $74.9 billion. Exports to Africa fell 7.1% to $13.5 billon, while imports from Africa increased 2.9% to $8.9 billion. 

    On the import side, the highlight was a boom in imports from the U.S., which increased 23.7% to $14.9 billion. The preliminary report doesn’t break out countries by specific product, but according to an analysis by Trade Data Monitor, in the 12 months between July of 2023 and June of 2024 included, the top Chinese imports from the U.S. included semiconductors, petroleum, copper, cars and fresh fruits and nuts. 

    Imports from the EU rose 7.5% to $24.9 billions, while purchases from ASEAN nations rose 11.4% to $33.3 billion. Imports of high-tech products rose 18.6% to $66.7 billion. 

    China’s appetite for industrial goods, an important bellwether for the global economy, appears solid. Imports of coal increased 17.5% to $4.5 billion. (It also rose by roughly the same amount by quantity.) China ramped up imports of iron ore and copper quantities by roughly 10% each. 

  • China Reboots Trade Thanks to Africa, India, Latin America

    China Reboots Trade Thanks to Africa, India, Latin America

    Don’t let anybody tell you that globalization is dying—at least, not yet.

    Global trade economists obsess over consumer demand and rising protectionism in the U.S. and Europe, but this week’s release of Chinese trade statistics shows that other markets might soon be catching up in relevance.

    The Promise of Other Markets

    China’s exports to Latin America, Africa and India all rose by double-digits in the first two months of 2024. China releases its January and February trade data together every year to make up for the dip corresponding with Chinese New Year, which can fall in either month. The unique two-month batch of trade data is one of the spring’s most hotly-anticipated economic releases.

    Overall, China’s exports increased 7.1% year-on-year in January and February to $528 billion, and the country’s imports rose 3.5% to $402.9 billion. The relatively strong performance surpassed analysts’ expectations thanks to a recovery in global consumer demand, an expansion in high-tech investment and artificial intelligence, and a low baseline because of Covid shutdowns in 2022 and 2023. It also matched with encouraging economic data from other regions of the world, including South Korea, Germany, and Taiwan. 

    A Slump in Europe

    Exports to the U.S., China’s largest single trade partner, increased 5% to $73.4 billion, and exports to ASEAN countries rose 6% to $82.7 billion. The negative outlier among the top trading partners was the European Union. Exports to the EU fell 1.3% to $78.3 billion.

    The biggest surprise was how much China exported to countries that rank in the middle or at the bottom of the world’s economic league table. Exports to Latin America rose 20.6% (and were up 33.8% to Brazil) to $40.9 billion, shipments to India rose 12.8% to $19.5 billion, and sales to Africa rose 21% to $28.8 billion.

    “As our export commodities are climbing up the value chain, coupled with China’s proactive opening up and the expansion of import market opportunities, China has great potential both in import and export,” said minister of commerce Wang Wentao at a press conference this week. Wang pointed out that China’s export reboot has become increasingly reliant on what he called the “big three”: Electric vehicles, lithium-ion batteries, and solar panels.

    Classic Manufacturing Rebounds

    Thanks to demand driven in part by consumer in Latin America, Africa and India, China’s traditional manufacturing consumer staples are enjoying a resurgence. Exports of footwear, for example, rose 14.4% to $8.7 billion. Exports of toys increased 15.9% to $5.7 billion. And its heavy industrial sector continued to hum. Sales motor vehicles rose 12.6% to $15.7 billion, and exports of ships rose 173.1% to $6.8 billion. Exports of mobile phones increased 12.8% to 123.7. million by quantity, and dropped 18.2% to $19.3 billion by value. Exports of rare earths rose 18.7% by quantity to 8,773.9 tons. By value, they shrank 44% to 81.8$ billion, demonstrating by their price decline that they are perhaps not as rare as some would have you believe. 

    Asian Exporters March On

    On the import side, the U.S. and Europe continued to lose out to Asian partners. Imports from the EU fell 9.4% to $39 billion, and from the U.S. dropped 9.7% to $26.1 billion. Imports from ASEAN countries increased 3.3% to $57 billion, and from Latin America increased 8.1% to $41.7 billion. Imports from India increased a whopping 34.7%, but from a lower baseline of $3.7 billion. Imports fell across a wide variety of categories and were saved only by big purchases of mechanical and electrical products, up 7.7% to $137.2 billion; iron ore, up 22.8% to $27.5 billion; and crude oil, up 2.8% to $51.3 billion.

    The export resurgence has further boosted China’s trade surplus with the rest of the world. It was $125.1 billion in the first two months, up from $116.9 billion over the same period in 2023, and a new record.

  • Vietnam’s Secret Weapon: Agriculture

    Vietnam’s Secret Weapon: Agriculture

    In a tricky global economy, Vietnamese exports shrank in 2023, but the rising economic power managed to be one of the only countries to increase merchandise exports to China, thanks to a surprising surge in exports of fruits and vegetables, as well as rice, demonstrating the importance of export diversification.

    The Difficulties of 2023

    The country of 97.5 million encountered headwinds in 2023. Its gross domestic product rose only 5.1%, below recent trends. In 2022, it had been 8%. Some foreign investors pulled back amid crackdowns on corruption. Vietnam’s imports fell 9.2% to $326.4 billion, an indication of general economic sluggishness.

    The Vietnamese export machine, key to the country’s prosperity, closed the year strong. In December, the country’s exports increased 8.1% year-on-year in December to $31.5 billion. However the jump couldn’t save Vietnam’s year. Total exports in 2023 fell 4.6% to $354.7 billion. Exports generated by foreign companies fell 6% in 2023 to $257.2 billion. Vietnam was hurt by the same confluence of forces that damaged trade elsewhere: inflation, weak consumer demand, and regression after a post-Covid boom.

    Exporting to Prosperity

    The key to Vietnam’s economic growth is its export sector, which is heavily reliant on shipments to two markets, China and the U.S., the world’s top two economies and superpowers keen to forge alliances with Vietnam. Ever since China joined the World Trade Organization in 2001, the U.S. and European Union have salivated about prying open the country’s billion-consumer market. Vietnam is still only the 11th biggest supplier of Chinese imports, but unlike Europe and the U.S., its shipments to China have been rising. In 2023, Vietnamese exports to China increased 5.6% to $61.2 billion, while U.S. exports to China fell 4% and European Union exports rose only 0.4%.

     The Diversification Trick

    Vietnam’s trade with the bigger power isn’t concentrated in a few sectors. Exports to China of fruits and vegetables, for example, leapt 138.7% to $3.6 billion in 2023. Exports of computers, electrical products and parts rose 9.8% to $13 billion. And sales of mobile phones ticked up 3.7% to $16.9 billion. To be sure, Vietnamese exports to China of cement, coal, crude oil and wood all fell, but the country isn’t exclusively reliant on a few commodities.

    By comparison, in 2023 Vietnamese exports to the U.S. declined 11.3% to $97 billion. Exports of textiles and garments dropped 16.7% to $14.5 billion. Shipments of mobile phones and parts fell 33.5% to $7.9 billion. And sales of machines, equipment and tools fell 9.8% to $18.2 billion. And there was no surge in agricultural exports to make up for the shortfalls. Sales of fruits and vegetables rose 4% to a meager $257.7 million. Exports to the U.S. of Vietnam’s thriving fisheries sectors dropped 26.9% to $1.6 billion.

    The Battle for Vietnam

    As Vietnam’s economy has matured, it has developed into a strategic economic ally for every economic power in the world. Chinese manufacturers see a ripe consumer market. U.S. industry sees a less fraught low-cost labor market. And everybody else sees a young, dynamic country climbing the rankings of the world’s economies. It’s no surprise that both U.S. president Joe Biden and Chinese leader Xi Jinping visited Vietnam during the second half of the year. It was the only country that both leaders visited in 2023. Everybody wants a piece of Vietnam.

    But trade with Vietnam did not fare as well in 2023 as countries had hoped. Exports to the European Union fell 7% to $44 billion, while imports from the EU dropped 4.1% to $15.3 billion. Exports to ASEAN countries dropped 4.5% to $32.6 billion. Imports from ASEAN countries declined 13.5% to $40.9 billion. Exports to the United States dropped 11.3% to $97 billion. Imports from the U.S. fell 4.5% to $13.8 billion. Exports to China rose 5.6% to $61.2 billion. Imports from China fell 6.6% to $110.6 billon. So the only categories to grow in the major trading relationships was exports to China.

    Silver Linings

    There were a few other bright spots. Exports to India rose 6.8% to $8.5 billion. Total exports of fruits and vegetables increased 66.7% to $5.6 billion, and total rice exports rose 35.3% to $4.7 billion. However, exports of footwear dropped 15.3% to $20.2 billion, and exports of textiles and garments fell 11.4% to $33.3 billion. The government has set a GDP growth target of 6% to 6.5% in 2023. With those traditional sectors dropping off, Vietnam will have to keep diversifying if it wants to meet its target.

  • Trade Data Monitor’s Top 10 Trade Trends Going Into 2024

    Trade Data Monitor’s Top 10 Trade Trends Going Into 2024

    It’s not an easy time for global trade–the roughly $25 trillion piece of the $105 trillion world economy. Protectionism is roaring in the U.S. and Europe, causing geopolitical tension with China. Inflation across most of the world has shrunk consumers’ wallets and imports, while deflation in China is also scaring businesses. Asian supply chains are slumping. After Russia’s invasion of Ukraine in 2022, the late 2023 conflict in Israel-Palestine has created more business uncertainty, danger for container ships transiting the Red Sea, and geopolitical tension. And then there’s the structural shifts in supply chains that have raised fears of deglobalization. That is probably less of a risk that people think. “We do see some signs in the data of trade fragmentation linked to geopolitical tensions,” said WTO chief economist Ralph Ossa. “Fortunately, broader deglobalization is not here yet. The data suggest that goods continue to be produced through complex supply chains, but that the extent of these chains may have plateaued, at least in the short run.” In other words, this is a time of change, more reason than ever to pay close attention to trends.

    Here are Trade Data Monitor’s top 10 ongoing trade trends at the start of 2024:

    1. Trade Crisis: Protectionism, price swings (inflation in the U.S. and Europe, deflation in China) and geopolitical tensions have created an uncertain environment for trade. The World Trade Organization now forecasts global trade to grow by only 0.8% in 2023, less than half the 1.7% increase predicted in April. For 2024, the WTO expects an increase of 3.3%, a modest recovery, but below the trend in the early 2000s.
    2. The COVID Effect: The COVID-19 pandemic depressed trade in 2020-2023, but now it’s triggered a booming in shipments of vaccines and medical test kits. The U.S. increased imports of medical test kits 46% to $44.7 billion in the 10 months of 2023. The top exporters of medical test kids are Switzerland (up 12% to $39.3 billion), Germany (up 9% to $24.5 billion), and the U.S. (up 11% to $16 billion), followed by Ireland, Belgium and the Netherlands.
    3. China Problem: It used to be that you could count on death, taxes and an uptick in Chinese exports. That’s no longer the case. Manufacturers have diversified their supply chains, consumers aren’t buying enough, and tariffs and export restrictions are rising. The upshot: In the first 11 months of 2023, Chinese exports declined 4% to $3.1 trillion. Exports to the U.S. over that time fell 13% to $463.7 billion.
    4. Asia’s Slump: China wasn’t the only Asian country to suffer declining exports. Singapore’s shipments fell 9.3% to $395.5 billion, South Korean exports declined 10% to $519.3 billion, and Japan’s sales fell 4.6% to $591.4 billion, and Taiwan’s exports fell 12.6% to $354.2 billion in the first 10 months of 2023.
    5. U.S. and European Rebound: The situation has been better for the U.S. and Europe. Supply chains are adjusting away from China, benefitting U.S. and European trade. Germany’s exports rose 1.5% to $1.4 trillion and French shipments increased 5.3% to $527.9 billion in the first 10 months of 2023. U.S exports declined 2.4% overall to $1.7 trillion, but that was mainly because of a decline in fuel prices. Shipments of electronics, machinery, cars, airplanes and pharmaceuticals all increased.
    6. Don’t Take Your Eye Off Electric Cars: Electric cars might be the most significant trade product in the world right now. Germany (up 86% in the first nine months of 2023 to $30.4 billion), China (up 112% to $25.1 billion), Belgium (up 78.1% to $13.3 billion), South Korea (up 89% to $10.4 billion) and the U.S. (up 41.4% to $5.8 billion) are leading the charge.
    7. The Energy Revolution: Investments in green energy, driven by governments and consumer demand, are propelling new trade flows. For example, U.S. imports of solar panels and related parts increased 70.1% to $19.5 billion in the first 10 months of 2023.
    8. Russia-China Trade: The huge boom in Russia-China trade, triggered by the war in Ukraine and subsequent U.S. and European sanctions, is still going on but it is finally showing signs of tapering off. Russia is now China’s sixth biggest source of imports and sixth biggest export destination. But after triple-digit increases in 2022, monthly increases are finally dropping. For example, in November 2023, Chinese exports to Russia increased 35% to $10.3 billion.  
    9. Regional Trade Boom: We’re seeing a healthy boom in regional trade networks. One example is the Middle East. For example, Iranian exports to Iraq (+73%) and Turkey (+32%) increased but the country’s shipments to China fell 16.3% in the first nine month of 2023. And the increases weren’t only driven by higher oil prices. Iran increased its oil exports to Iraq 332.8% to 88.4 million barrels in the first nine months of 2023.
    10. China is Buying All the Coal: While much of the rest of the world is trying to wean itself from fossil fuels, especially the dirtiest one, coal, China is ramping up imports. Ironically, it needs coal partly to power a new generation of power plants pumping out electricity for electric car batteries. In the first 10 months of 2023, it hiked purchases of the black rock 38% to $33.5 billion by value, and 96.6% by quantity to 250.3 million tons.

    John W. Miller is Trade Data Monitor’s Chief Economic Analyst, in charge of writing TDM Insights, a newsletter analyzing key issues through trade statistics. John is an award-winning journalist who’s reported from 45 countries for the Wall Street Journal, Time Magazine, and NPR.

  • China’s New Place in Global Trade: Number 1 Importer of Food&Ag

    China’s New Place in Global Trade: Number 1 Importer of Food&Ag

    As expected, China reported lackluster trade numbers this week, signaling a possible recession in the U.S. and more trouble for the global economy.

    Chinese exports fell for the first time in three months, dropping 7.5% year-on-year to $283.5 billion. Imports dropped 4.5% to $217.7 billion.

    The World Bank this week said that the global economy is in a “precarious state” and global gross domestic product growth will fall to 2.1% in 2023 and 2.4% in 2024 from 3.1% in 2022. Deputy chief economist Ayhan Kose called the current situation a “sharp, synchronized global slowdown.”

    One exception is China, which is expected to grow 5.6% this year and 4.6% next year.  But that growth will be animated by its internal engine, not by exports.

    The reports of shipments to the world’s richest economies, trade flows that have underpinned the global economy for 20 years, were especially bleak. Exports to the U.S. dropped 18.2% to $42.5 billion. Exports to the European Union fell 6.9% to $44.6 billion. Sales of consumers goods favored by Europeans and Americans continue to plummet. Exports of high-tech products dropped 13.5% to $65.5 billion. Sales of mobile phones fell 25% to $8.3 billion. Exports of footwear declined 9.3% to $4.6 billion.

    Chinese exports fell in other areas, too. Exports of agricultural products fell 7% to $8.1 billion. And it’s impacting other regions. Exports to Latin America fell 1% to $21.3 billion.

    To be sure, there were some bright spots for exports. Shipments to Africa soared 13.7% to $15.9 billion. And the automotive industry continues to boom. Exports of cars increased 123.5% to $9 billion.

    Exports of petroleum products increased 16% to $3.6% billion. Handbag and luggage exports rose 2.4% to $3.3 billion. Exports of steel products increased 7.9% to 8.4 million tons but fell 27.5% to $7.7 billion tons on price declines.

    However, one corner of China’s trade balance sheet glowed a shining green. Since 2020, propelled by the increasing prosperity of its people, the country has asserted itself as the world’s dominant buyer of agricultural products, to the extent that it now makes sense to see China’s demand for stuff its people can eat as one of its dominant characteristics in the global economy.

    In 2020, China passed the U.S and Europe as the biggest importer of food and agricultural products, buying $146.8 billion worth of a bucket of food and agricultural products compiled by Trade Data Monitor, compared to $132.9 billion for the EU and $120.8 billion for the U.S.

    In the first quarter of 2023, China imported $52.4 billion of that bucket, up 14.6% from the first quarter of 2022, while the U.S. imported $42.3 billion, up 1.3%, and the EU imported $42.2 billion, up 4.4%.

    In May of 2023, Chinese imports of “agricultural product” rose 2.6% to $22.9 billion. Imports of soybeans rose 14.4% to $7.4 billion by value, and 24.3% to 12 million tons by quantity. Imports of grain increased 6.3% to $9.4 billion.

    China’s appetite for food and agriculture might be what balances its trade surplus in the end. “China’s exports will remain subdued, as we anticipate the U.S. economy to enter recession,” Lloyd Chan of Oxford Economics wrote in a research note.

    In non-ag sectors, imports mostly declined as sharply as exports. Imports from the U.S. declined 9.7% to $14.3 billion. From Africa, they fell 7.9% to $9.4 billion.

    Two exceptions, both regarding commodity and agricultural powers: Imports from Latin America increased 9.1% to $23.1 billion, and imports from Canada rose 56.9% to $4 billion.

    And China of course continues to be Russia’s main trading partner, and those trade flows increase to record highs in May. Imports from Russia increased 6.6% to $11.3 billion. Exports to Russia rose 115% to $9.3 billion.