China’s trade data for April revealed that while exports increased as anticipated, imports experienced a surge exceeding initial forecasts.
According to the data, China’s exports in U.S. dollar terms were in line with expectations polled by Reuters as the figures grew by 1.5% year-on-year in April, while imports saw a notable 8.4% climb, exceeding an expectation of 4.8% increase from the same period last year.
Challenges such as lackluster domestic demand impacting imports and global demand slowdown, as well as conflicts with key trading partners like the U.S., have affected China’s trade performance.
Amidst factors like the Biden administration’s proposal to triple tariffs on Chinese steel and President Trump’s intention to raise tariffs on Chinese goods, trade figures of the world’s second largest economy have also been affected by COVID-19 pandemic as it accelerated efforts to diversify supply chains away from the country.
Meanwhile, analysts at Nomura highlighted that despite trade diversions, a significant portion of trade may still have ties with China or Chinese-backed manufacturing facilities.
The analysts emphasized that if the U.S. aims to reduce its trade deficit through tariffs, a broader tariff approach on all imports would be necessary, without dismissing ideas like Trump’s suggested 10% tariff ‘ring around the country’.
