China’s Export Boom vs Weak Imports: Trade War, Domestic Struggles, and Global Outlook

China’s latest trade data shows a sharp contrast between booming exports and falling imports, highlighting the impact of the U.S.-China trade war and sluggish domestic demand. While Chinese exporters are rushing shipments ahead of escalating U.S. tariffs, domestic consumption remains under stress, putting pressure on Beijing’s growth targets.

China’s March Exports Beat Expectations

China’s exports rose by 12.4% year-on-year in March, far exceeding economists’ forecast of 4.4%. Analysts say businesses are likely frontloading shipments—sending goods early—to avoid high U.S. tariffs introduced by the Trump administration.

This sudden jump in export figures comes after a slow start to the year, where exports grew just 2.3% in the first two months, marking the slowest growth since April 2024.

China also saw a major increase in Q1 steel exports, reaching the highest levels for the first quarter since 2016, according to Reuters. However, iron ore imports fell to their lowest point since July 2023, indicating a slowdown in raw material demand.

Imports Continue to Fall: Domestic Weakness Shows

While exports surprised on the upside, China’s imports dropped by 4.3% in March, deeper than the expected 2% fall. This decline is mostly attributed to weaker domestic demand and a drop in international commodity prices, as per Chinese customs authorities. Fewer working days in the quarter also affected import activity.

Spokespersons from China’s Customs Department noted that despite the sharp drop in imports, bilateral trade with the U.S. still grew by 4%, proving that trade ties continue even under tense policy conditions.

However, domestic consumption remains a concern, with consumer prices falling for the second straight month, and producer prices (the prices manufacturers get for their products) declining for the 29th month in a row. These are worrying signs for China’s internal economy.

Tariff War Escalates: Trump’s 145% Blanket Tariff Hits China

Since Donald Trump’s return to the presidency, the U.S. has implemented aggressive trade policies targeting China. This includes a 145% blanket tariff on all Chinese imports, alongside a specific 20% duty tied to China’s alleged role in the fentanyl trade.

In response, Beijing has imposed retaliatory tariffs, including a 125% tariff on certain U.S. goods. This back-and-forth has made the global business environment uncertain, affecting companies on both sides.

Recently, the U.S. granted temporary tariff exemptions for smartphones, laptops, and certain electronics, aiming to ease pressure on American tech firms. While China welcomed the exemption, its Commerce Ministry said it was not enough to resolve broader issues.

China Calls for Full Tariff Removal

China’s Commerce Ministry has urged the U.S. to completely remove all reciprocal tariffs, calling for a shift away from “unfair” practices. A ministry spokesperson emphasized that while exemptions for tech products are a good step, a full policy reversal is needed to stabilize trade ties and return to mutual respect.

Chinese officials also announced that they would strictly enforce inspections and quarantine of American imports, especially after detecting salmonella in poultry meat and bonemeal shipments from the U.S.

Economic Outlook: Growth Target Under Pressure

The Chinese government has set a GDP growth target of “around 5%” for 2025, but reaching this goal is becoming harder amid global trade tensions and weak domestic performance.

Goldman Sachs has lowered China’s growth forecast to 4.0%, down from its earlier estimate. The investment bank noted that even though Beijing may implement stimulus measures, they are unlikely to fully offset the damage caused by U.S. tariffs and falling consumer confidence.

What Lies Ahead?

The trade war is far from over, and the economic path for China remains complex. While export numbers bring some optimism, the decline in imports, falling prices, and trade tension with the U.S. raise concerns about sustained growth.

Unless both countries move toward easing tariff pressure and rebuilding trust, the global trade environment may remain volatile. For now, all eyes are on how Beijing balances export-led growth with domestic stability—and whether Washington softens its aggressive stance.