China’s Exports To The U.S. Fell 34% In May

China’s exports to the U.S. plunged 34.5% year-over-year in May, their biggest decline since the onset of the Covid-19 pandemic five years ago.

Imports from the U.S. into China declined 18% during May, and China’s trade surplus with America shrank by 41.6% from a year earlier to $18 billion U.S.

The collapse in bilateral trade comes amid continued tariffs that each country has placed on the other. U.S. and Chinese tariffs on each other’s goods currently stand at more than 30%.

The latest data also shows that China has shifted its trade focus to other Asian nations, with its shipments to its Southeast Asian neighbours rising 15% from a year earlier in May.

Chinese shipments to the European Union (EU) and Africa rose 12% and 33%, respectively last month.

China’s total trade surplus in May actually increased 25% from a year ago to $103.20 billion U.S. despite the sharp decrease in two-way trade with America.

Additionally, China’s exports of rare earth metals dropped 5.7% from a year ago as the government in Beijing tightened export controls of the critical metals and minerals that are used to make electronics and motor vehicles.

China’s exports of smartphones and home appliances, two of its biggest trade items, fell 10% and 6%, respectively in May.

U.S.-bound exports are expected to see some recovery in June, although by how much is not clear.

U.S. and China struck a preliminary deal in Geneva, Switzerland, last month that led both sides to lower or completely eliminate many of their tariffs.

Chinese and American trade negotiation teams are expected to meet for a new round of talks in London, England in coming days.

The new round of trade talks come after the two sides accused each other of violating the trade agreement struck in Switzerland a month ago.