Analysis: U.S. Trade Truce No Panacea for China’s Exporters

Chinese exporters have been accelerating shipments to the U.S. as they take advantage of a temporary tariff truce, which is expected to give a boost to China’s May trade data. However, analysts warn that the longer-term outlook for China’s export-oriented businesses remains uncertain and challenging, especially in the context of ongoing China-U.S. trade tensions and unpredictable tariff policies. [para. 1]

Official export figures for May had not yet been released by the General Administration of Customs at the time of writing, but high-frequency data from industry sources suggest a significant rebound in shipments since the May 12 announcement of the 90-day suspension or cancellation of most new tariffs as negotiations continued between China and the United States. [para. 2]

According to data from Vizion and FreightWaves, as cited by Guosheng Securities, container booking volumes on China-to-U.S. shipping routes surged by over 54% month-on-month in May. More specifically, bookings between May 12 and May 18 jumped by 157.6% compared to the previous week, and saw a year-on-year rise of 14.5%, marking the first positive annual growth since former U.S. President Donald Trump announced “reciprocal tariffs” in early April. Analysts believe that, following the truce announcement, container bookings exceeded even the pre-tariff announcement levels. [para. 3][para. 4][para. 5]

Guosheng Securities estimates that China’s exports increased by about 5% year-on-year in May, compared with 8.1% growth in April and 12.3% in March. However, analysts at Huachuang Securities forecast a higher growth of around 9%, citing the resilience shown in metrics such as container and cargo throughput at ports. [para. 6][para. 7]

Despite the Geneva trade truce in mid-May being hailed as a major step toward de-escalating trade tensions, strains quickly resurfaced. On May 30, U.S. President Donald Trump accused China via the social platform Truth Social of violating the agreement, without providing details. The same day, the U.S. Trade Representative alleged that China had not relaxed controls on exports of critical minerals as promised. China refuted these accusations, with a foreign ministry spokesperson insisting that China had responsibly implemented the Geneva consensus and counter-accusing the U.S. of undermining the agreement. [para. 8][para. 9][para. 10]

Legal uncertainty in the U.S. adds to the turmoil, as the Court of International Trade ruled on May 28 that Trump had exceeded his authority in imposing tariffs, only for the Court of Appeals for the Federal Circuit to allow them to remain during the appeals process. [para. 11]

Looking forward, most analysts are cautious about the prospect for sustained export growth. There are concerns that the recent front-loading of shipments may have exhausted some of this year’s demand, and even if U.S. policies soften after the 90-day truce, it may not translate into further gains. The ongoing unpredictability in trade policy is expected to impact both investment and profits for Chinese exporters. [para. 12][para. 13][para. 14]

Companies are reportedly focused on fulfilling existing orders rather than expanding capacity, given pervasive uncertainty. The front-loading export surge may also involve aggressive price cutting to counter higher tariffs and secure new business, likely adding downward pressure on profit margins. Citic Securities notes that current U.S. tariffs on Chinese goods are now more than 30% higher than at the end of 2024, and commodity price indexes suggest that the pressure on profits is already materializing. [para. 15][para. 16][para. 17]