The Chinese export to the United States fell by 34.4 percent last month. That is the largest decrease since February 2020 and has everything to do with the trade war between the two countries.
“The trade war between China and the US led to a significantly lower export to the US, but the damage was compensated by a stronger export to other countries,” says chief economist Zhiwei Zhang of asset manager Pinpoint Asset Management.
While Chinese exports to the US plummeted by 34.4 percent, exports to other countries rose by 11 percent. China’s total exports rose by 4.9 percent last month. That is slightly less than the 6 percent that economists had expected.
Chinese imports from the US also fell in May. This represents a decrease of 17.9 percent. Total Chinese imports decreased by 3.4 percent last month. Despite measures, China does not seem to be succeeding in stimulating domestic consumer demand.
The inflation figures also reinforce concerns about the Chinese economy. A report from the National Bureau of Statistics (NBS) shows that consumer prices fell by 0.1 percent year-on-year in May. This decrease causes consumers to further postpone their purchases in the hope that goods will become even cheaper.
Last month, the US and China agreed to lower import duties. China is reducing the levy on American goods from 125 percent to 10 percent. The US, on the other hand, is reducing the levy on Chinese goods from 145 percent to 30 percent. The agreements are valid for ninety days. In the meantime, a solution must be found for the trade conflict.