China’s exports surge as shipments to Southeast Asian countries offset plunge in U.S. trade

China’s exports surged in April on the back of a jump in shipments to Southeast Asian countries, offsetting a sharp drop in outbound goods to the U.S. as prohibitive tariffs kicked in.

Exports jumped 8.1% last month in U.S. dollar terms from a year earlier, according to data released by customs authority on Friday, sharply beating Reuters’ poll estimates of a 1.9% rise.

Imports slumped by just 0.2% in April from a year earlier, compared with economists’ expectations of a 5.9% drop.

China’s outbound shipments to the U.S. plunged over 21% in April year on year, while imports dropped nearly 14%, according to CNBC’s calculation of official customs data.

The surge in overall exports could be partly due to transshipment through third countries and contracts that were signed before the tariffs were announced, Zhiwei Zhang, president and chief economist at Pinpoint asset management said in a note. Zhang expects trade data to weaken gradually in the next few months.

China’s exports to the Association of Southeast Asian Nations surged 20.8% in April from a year earlier, accelerating from a 11.6% growth in March. While Vietnam and Malaysia remained the main destinations for Chinese exports to the region, Indonesia and Thailand saw shipments from China grow 37% and 28% year on year, respectively.

Meanwhile, China’s exports to the European Union rose 8.3% while imports fell 16.5% year on year.

U.S. President Donald Trump has placed tariffs of 145% on all imports from China, prompting it to retaliate with tariffs of 125% on American imports. So far, both sides have sought to blunt the economic impact of triple-digit levies by granting exemptions on certain critical products.

The number of container vessels from China to the U.S. had dropped dramatically toward the end of April, Raymond Yeung, chief economist for Greater China at ANZ Bank said in a note Thursday.

Chinese authorities have ramped up stimulus efforts in recent weeks to counter the impact from tariffs on its economy, with steps including easing monetary policy and measures to support tariff-hit businesses.

China’s factory activity fell to a 16-month low in April, with a gauge on new export orders dropping to its lowest since December 2022.

Concerns have been growing that the fallout from tariffs would soon spill over to the job market, with Goldman Sachs estimating the county could lose 16 million jobs, or 2% of its labor force, involved in the production of U.S.-bound goods.

The latest purchasing managers’ index indicated that employment fell across the board last month, as manufacturers started to halt production and put workers on paid leave.

China is set to release its consumer and wholesale inflation data on Saturday, which will likely show a sustained deflation. Consumer price index is forecast to slip 0.1% from a year ago and the producer price index decline 2.8%.

The benchmark CSI 300 index fell 0.23% on Friday. Chinese offshore yuan was steady at 7.2483 per U.S. dollar.

Investors would follow closely the upcoming meeting between U.S. and Chinese officials in Switzerland over the weekend that has raised the prospects for a potential de-escalation in the ongoing trade war.

“Tariff de-escalation, if it materializes, would serve as a major positive for Chinese equities,” said Laura Wang, equity strategist at Morgan Stanley, while cautioning that the negotiation process would be “lengthy, with ups and downs.”