Beijing: China’s export expansion slowed considerably in May 2025, marking the weakest growth in three months as the impact of ongoing U.S. tariffs continues to weigh heavily on trade. Official data revealed that exports grew by just 4.8% compared to the same period last year, a notable decline from April’s 8.1% increase. The drop was especially severe in shipments to the United States, which plunged by 34.5% — the steepest decline since early 2020.

This contraction reflects the persistent challenges posed by the U.S.-China trade dispute, even after a partial suspension of tariffs earlier in the year failed to provide a significant boost. The situation is further complicated by mounting deflationary pressures within China’s economy.

Data also showed that the Producer Price Index (PPI), which tracks factory gate prices, fell 3.3% year-on-year in May — the sharpest drop in nearly two years. The Consumer Price Index (CPI) declined by 0.1%, extending a trend of deflation that signals weak domestic demand and sluggish economic momentum. Factors such as a cooling housing market and excess manufacturing capacity continue to undermine price growth.

In response, Chinese authorities have rolled out monetary stimulus efforts, including interest rate cuts and a 500 billion yuan loan scheme aimed at boosting consumption. However, economists warn that these measures may not be sufficient to counter the structural economic issues that threaten to prolong deflation into next year.

Looking ahead, high-level trade negotiations between U.S. and Chinese officials are scheduled to take place in London. These talks are seen as pivotal in easing bilateral trade tensions, addressing tariffs, and potentially stabilizing China’s export outlook. Market watchers remain cautiously optimistic but stress that only substantive agreements will restore confidence.

As China navigates through this period of economic uncertainty marked by slowing exports, deepening deflation, and strained trade relations, the coming months will be critical in shaping the country’s growth trajectory and global economic standing.