China's trade declines in Jan-Feb amid uncertainty

China's exports and imports weakened in January and February, with demand slipping amid global trade uncertainty.

Exports rose by only 2.3% compared to the previous year, falling short of the 5% growth expected by economists, while imports declined by more than 8%. This slow start to the year comes amid ongoing concerns over U.S. tariffs and other trade policies, reports AP.

China’s overall trade surplus increased to $170.52 billion in the first two months of 2025. The country’s customs agency typically releases combined trade data for January and February to avoid distortions caused by the Lunar New Year holidays.

Julian Evans-Pritchard from Capital Economics noted that export growth slowed in the first two months of the year, with less demand from tariff front-running than anticipated. He also pointed out that this slowdown occurred before any significant effects from tariffs, which are expected to cause sharp declines in shipments to the U.S.

The reduction in imports suggests that the demand boost from government stimulus spending late last year has already begun to reverse, Evans-Pritchard added.

This week, U.S. President Donald Trump’s second 10% tariff hike on Chinese imports took effect, which is likely to impact Chinese exports in the coming months. In response, both Chinese suppliers and buyers had rushed to make purchases before the tariff increases.

While Chinese officials have criticized the tariff hikes, they remain confident in the resilience of the economy and its ability to offset declines in U.S. exports through trade with other countries. They have also expressed openness to talks based on mutual respect.

Exports were a key factor in China meeting its 5% economic growth target last year, and the government has set the same growth target for this year, despite ongoing trade uncertainties.

Exports to the U.S. rose by 2.3% year-on-year in January and February, while shipments to the European Union and Japan grew by just 0.6% and 0.7%, respectively. Exports to Russia dropped by 10.9%.

The Association of Southeast Asian Nations (ASEAN) remained China’s largest trading partner, with exports growing by 5.7% year-on-year.

Lynn Song of ING Economics suggested that although it's premature to draw conclusions from a few months' data, the figures raise questions about future export trends, particularly as U.S. tariffs begin to have an impact. She expects the effects to be gradual in the coming months.