BEIJING, July 14 – China’s exporters accelerated shipments in June, aiming to get ahead of the upcoming U.S. tariff hikes set to take effect in August.. As the window to take advantage of a temporary tariff truce narrows, manufacturers are racing to get goods across the Pacific and to nearby markets, especially in Southeast Asia, in hopes of protecting profits and retaining global market share.
With tensions between the world’s two largest economies still unresolved, companies are hedging against further disruption. The current reprieve in tariffs has encouraged a wave of frontloading, but uncertainty hangs in the balance. Whether a long-term agreement can be achieved remains to be seen. Meanwhile, the approaching risk of additional U.S. duties—some potentially exceeding 100%—has sent shockwaves across global supply chains, forcing firms into high gear.
June Trade Data Shows Surge in Exports
China’s exports grew by 5.8% in June on a year-over-year basis, surpassing forecasts and improving on May’s 4.8% gain. The growth was mainly driven by businesses rushing to ship goods ahead of possible U.S. trade penalties set for August. On the import side, there was a slight recovery, with inbound shipments climbing 1.1% following a 3.4% decline the month before.
Despite ongoing challenges in global demand, Chinese exporters have managed to maintain momentum, especially through strategic use of Southeast Asian transit hubs. Exports to the 10-member Association of Southeast Asian Nations (ASEAN) jumped by 16.8%, signaling a growing reliance on regional partners amid international tensions.
Trade experts suggest that while the current bump in activity reflects frontloading before tariffs, the longer-term picture remains complicated. Some freight rates for China-bound shipments to the U.S. have started to decline, indicating that the rush may be easing. Still, concerns about continued trade diversion and rerouting persist, which could draw further scrutiny from Washington and other major markets.
Additionally, exports to the U.S. recorded a notable month-on-month increase of 32.4%, making June the first full month to benefit from reduced American tariffs. Still, when measured against the same time last year, shipments to the U.S. remained down, reflecting the ongoing pressure in trade relations between the two countries.
China’s trade surplus widened to $114.7 billion in June, up from $103.22 billion in May. One key contributor to the rise was a 32% jump in rare earth exports compared to the prior month, a sign that recent agreements to facilitate trade in critical materials may be showing results.
Tariff Deadline Sparks Regional Strategy Shift
As the August 12 deadline approaches, Chinese companies are not only increasing the speed of shipments to the U.S. but are also recalibrating their focus toward closer markets. With weak domestic demand and uncertainty abroad, producers are prioritizing neighboring countries that offer easier access and less geopolitical friction.
Many exporters are turning their attention to economies within Southeast Asia, both to expand their customer base and to use them as transit points. However, recent developments from Washington have added new layers of complexity. The U.S. president’s latest announcement of a 35% tariff on Canadian goods, as well as planned duties on other partners, has further shaken confidence in the reliability of American trade policy.
A particularly troubling move for Chinese exporters is the newly introduced 40% tariff on goods routed through Vietnam to the U.S, a route heavily relied upon to avoid direct tariff exposure. This adds pressure on companies that have invested in third-country transshipment strategies to cushion the impact of trade restrictions.
Adding to the concern, the U.S. administration has also proposed a 10% tariff on imports from BRICS nations, a group in which China plays a leading role. This potential policy shift could further undermine China’s exports and complicate ongoing trade negotiations.
Despite the volatility, China’s import figures offer a few signs of resilience. Soybean imports from Brazil soared to 9.73 million tons in June, setting a same-month record, while purchases from the U.S. remained limited at just 724,000 tons. Crude oil imports also climbed, reaching the highest daily rate since August last year, as refineries boosted operations with increased supplies from Saudi Arabia and Iran. Iron ore imports rose 8% from the previous month, indicating stronger activity in industrial sectors.
Even so, analysts warn that if U.S. tariffs climb above 35%, they could severely erode the earnings of Chinese producers. Many firms have already cut prices to maintain competitiveness, and any further cost burden will make it difficult to remain viable in foreign markets.
Looking ahead, economists predict a slowdown in export growth in the months to come. With limited options to lower prices further and increasing global scrutiny over rerouting practices, Chinese exporters may find it harder to expand market share. This expected dip could weigh on the broader economy, especially as domestic recovery remains sluggish.
While officials on both sides continue to negotiate, businesses are left to navigate an uncertain trade landscape, balancing speed with caution as they rush to meet the next tariff deadline.