Analysis: Multiple Factors Boost China’s July Trade Figures

In July 2025, China’s dollar-denominated exports recorded a significant year-on-year growth rate of 7.2%, up from 5.9% in June, exceeding Bloomberg’s forecast of 5.6%. Imports also improved notably, rising to 4.1% from 1.1% in June, surpassing expectations of a 1% contraction. The trade surplus narrowed slightly to $98.2 billion, but this still represented a $12.8 billion year-on-year increase, sustaining domestic aggregate demand. This marked improvement in both exports and imports suggests a broad-based recovery in global trade activity in the period [para. 1][para. 2].

A key driver supporting the robust export performance was anticipation of new U.S. tariffs under Section 232 and other trade policy actions expected in August, leading to a surge in “rush shipments” prior to the implementation of higher tariffs. On July 31, President Donald Trump signed an executive order imposing new "reciprocal tariffs" on 69 countries and regions, with rates ranging from 10% to 41%, effective from August 7. Notably, Chinese goods retained a 10% tariff during a temporary exemption until August 12, after which uncertainty loomed. Meanwhile, since a tariff increase in April, Chinese firms have accelerated overseas expansion and supply chain reconfiguration, with strong rebounds in exports to Southeast Asia and the EU reflecting trade diversion. The global semiconductor upcycle also benefited Chinese exports, as seen by a sharp resurgence in exports to South Korea and Taiwan, with South Korea’s semiconductor exports up 32% year-on-year in July [para. 3][para. 4][para. 5].

Product-level analysis revealed mixed trends. Mechanical and electrical product exports slipped slightly but remained resilient, with a notable 29.2% annual increase in integrated circuit exports, even as consumer electronics exports, including mobile phones and computers, saw deep declines. Light industrial textiles such as apparel, footwear, and toys registered negative growth, while automobile exports gained momentum, evidenced by a 12.1% year-on-year jump and narrowing price declines. Steel and fertilizer exports rebounded sharply, mainly driven by strong volume growth at the expense of lower prices, signaling spillover demand from expanded production capacity [para. 6][para. 7][para. 8][para. 9].

From a geographic perspective, China’s exports to the U.S. fell significantly (-22% in July, compared to -16% in June), dragging down overall export growth; however, exports to other regions were robust. The EU, ASEAN, Africa, and Latin America all posted strong or improving growth. China’s exports to Africa grew by 42.4% year-on-year, raising Africa’s share of total exports to 6%. Latin America also shifted to positive growth at 7.7%, signifying the diversification of China’s export markets. Exports to ASEAN countries remained resilient, and those to South Korea and Taiwan benefited from the semiconductor trade cycle [para. 10][para. 11][para. 12].

On the import side, the 4.1% year-on-year rise in July was led by agricultural products and energy, while industrial raw material imports declined. Imports from the U.S. continued to drop despite an easing in tariffs earlier in the year, falling 18.9% year-on-year [para. 13].

Looking forward, the global tariff environment is set to become even more complex following the introduction of reciprocal tariffs and new Section 232 measures. Despite this, expansions in fiscal and monetary policy by major economies (notably the U.S.) are expected to support global demand and keep China’s export growth robust, particularly toward Africa and ASEAN. However, the main risk lies in potential declines in global trade volume, even as external demand is predicted to stay resilient due to policy stimulus abroad [para. 14].