China-US Tariff War Intensifies: China's Exports to the US Decrease by 19% Year-over-Year in April 2025, Shipping Volume Drops Sharply

In April 2025, the tariff war between China and the US heated up, leading to a 19% year-on-year decrease in Chinese exports to the US and a sudden 45% drop in shipping volume. Although shipments from Chinese ports increased by 7% year-on-year, trade flow with the US shrank. To avoid the 145% US tariff, Chinese companies turned to rerouting trade through Southeast Asia, but this route will face strict US scrutiny starting in May. The report gathers official and market data to analyze the impact of tariff policies on Chinese exports.

Exports to the US Drop by 19% Year-on-Year, China's Export Momentum Freezes

A recent report by BofA Securities indicates that in April 2025, China's exports to the US decreased by 19% year-on-year, in stark contrast to the 8.9% annual increase in March. This shift occurred after both China and the US imposed tariffs exceeding 100% on April 2, indicating that the policy implementation was quickly reflected in the trade data. The new export orders index in China's manufacturing PMI also fell to 47.3, the lowest since December 2022, indicating that foreign trade companies have entered a "frozen period" in order volumes.

According to the "Q1 2025 China Macro Financial Analysis Report" released by the Chinese Academy of Social Sciences' Institute of Finance, the market estimates that China's export decline to the US could exceed 60%, potentially dragging down the total annual export volume by nearly 10%. The report states that actual trade between the US and China is in a "frozen" state, putting pressure on China's overall export performance.

Shipping Volume Drops Sharply, Port Shipment Data Shows Discrepancies

Shipping data further confirms the downward trend in exports. From April 18 to 27, the tonnage of container ships from China to the US plummeted by 45%, equivalent to a daily reduction of 27,000 TEUs. The overall shipping volume growth rate for April turned from a 10% increase in March to a 7% decrease, marking the largest drop since the 2020 pandemic.

However, data released by China's Ministry of Transport shows that in the week ending April 27, national port container handling reached 6.7 million, an annual increase of approximately 7%. In air transport, the number of international cargo flights increased by 30% annually, mainly benefiting from e-commerce platforms Temu and Shein rushing to ship before the small package tax exemption policy ends on May 2.

These data present a clear contradiction. Analysts point out that there is a 3 to 5-day time lag in shipping data, and the "prosperity" at the end of April may be a "rush to export" effect before the tariffs took effect. Additionally, the proportion of high-value-added goods exports has decreased, meaning that even if tonnage remains stable, the actual export value may still shrink.

Transshipment Trade Becomes a Short-term Refuge, May Face Blockage

Facing high tariffs, Chinese companies are turning to Southeast Asia for transshipment trade. Ports in Vietnam and Malaysia have recently become congested, reflecting the trend of Chinese goods being rerouted through third countries to the US. The US provides a 90-day tariff exemption for third-party countries, becoming a "gray channel" for Chinese companies.

Export data from Tianjin Port also shows abnormal fluctuations. On April 13, export volume plummeted by 50% compared to the beginning of the month but quickly rebounded to a yearly high by the end of the month, indicating a surge in "order modification and re-signing" activities. These phenomena indicate that companies are actively seeking ways to circumvent tariffs.

However, BofA Securities warns that starting in May, the US will strengthen the inspection of certificates of origin, potentially closing the "lifeline" for transshipment trade. At that time, Chinese export companies will face more severe challenges.

Gap Between Official and Market Data

Despite some official data showing resilience in exports, market and third-party observations indicate that actual trade activities have significantly shrunk. According to data from shipping company Elane, the container volume at the top 20 ports only decreased by 2%, but still grew by 11% compared to the same period last year. The IMF noted that exports to non-US regions decreased by 5% monthly and increased by 4% annually in April. Data from the Ministry of Transport shows that freight volume in the last week of April hit a new annual high, with a 5% annual increase.

These data discrepancies reflect the impact of different statistical methods and timing, highlighting the rapid changes in corporate behavior and trade flows under a high-tariff environment.

Policy Response and Official Position

In response to export pressure, the Chinese Academy of Social Sciences report proposes four policy recommendations: first, issuing special government bonds; second, distributing consumption vouchers to stimulate domestic demand; third, stabilizing the real estate and financial markets; and fourth, providing direct subsidies and tax reductions to foreign trade companies affected by tariffs to assist in their transformation or domestic sales.

Additionally, the report emphasizes that the tariff war puts pressure on China's labor market, necessitating enhanced early warning and policy intervention. The Chinese government has not yet publicly stated its position on the transshipment trade phenomenon but has signaled a willingness to negotiate and is reportedly drafting a "tariff whitelist" to alleviate pressure on certain industries.

References

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