China's Exports Suffer The Worst Downturn Since February As Tariffs Hammer US Demand

• Chinese exports unexpectedly fell in October after months of front-loading U.S. orders to beat President Donald Trump's tariffs, in a stark reminder of the manufacturing juggernaut's reliance on American consumers, even as it woos buyers elsewhere.
• The world's second-largest economy has pushed hard to diversify its export markets since Trump won last November's presidential election, bracing for a resumption of the trade war that dominated his first term in office, and seeking closer trade ties with Southeast Asia and the European Union. "It appears the rush to ship goods to the U.S. ahead of tariff hikes subsided in October," said Zhang Zhiwei, chief economist at Baoyin Capital Management. "With export momentum now waning, China may need to rely more heavily on domestic demand."
• Chinese shipments to the U.S. tumbled 25.17% year-on-year, the data showed, while those to the European Union and Southeast Asian economies - big trading partners with whom policymakers have sought to bolster ties amid tariff tensions with Washington - grew by just 0.9% and 11.0%, respectively.
• Most analysts largely agree that Chinese manufacturers have pushed as many goods into the world as possible for now.
• "I think the PMI was already warning us that Chinese exports cannot continue to grow forever, and it's not only because of the U.S. but because the global economy is slowing," said Alicia Garcia-Herrero, chief economist for the Asia-Pacific at Natixis.
• "Exports through Vietnam to the U.S. will decelerate once the front-loading is over, and we're there. So, I think it's going to be much tougher for China in the fourth quarter, which means it's going to be tougher in the first half of 2026 as well," she added

(Source: Reuters)