China’s economy demonstrated remarkable resilience in March 2025, posting a robust 12.4% year-on-year surge in exports despite escalating trade tensions with the United States.
The unexpected growth, reported by the General Administration of Customs, significantly outpaced Reuters’ forecast of 4.4% and marked the strongest export performance since October 2024. This surge, coupled with a trade surplus of $102.64 billion, underscores China’s ability to navigate global trade challenges, even as imports declined and domestic demand remained subdued.
Export Boom Defies Tariff Threats
The export boom was largely driven by businesses frontloading shipments to avoid prohibitive U.S. tariffs, which have climbed to a cumulative 145% on all Chinese imports since President Donald Trump’s inauguration in January 2025. The U.S., China’s largest single-country trading partner, saw a 9.1% increase in Chinese exports in March, according to customs data analyzed by CNBC. This growth reflects strategic efforts by Chinese firms to secure market access before tariffs further disrupt supply chains.
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Beyond the U.S., China’s trade with other regions also flourished. Exports to the Association of Southeast Asian Nations (ASEAN) rose 11.6%, with shipments to Vietnam surging nearly 19%. The European Union saw a 10.3% increase in Chinese exports, highlighting China’s success in diversifying trade partnerships. High-value sectors, including semiconductors and rare earths, posted gains of over 25% and 20%, respectively, reinforcing China’s dominance in critical industries.
“China’s export performance in March shows its adaptability in a challenging global environment,” said Lingjun Wang, vice head of customs administration, at a Monday press conference.
Wang criticized the U.S. for its “abusive use of tariffs” but emphasized Beijing’s commitment to fostering mutually beneficial trade with other nations.
Imports Signal Domestic Challenges
While exports soared, imports fell 4.3% year-on-year to $211.27 billion, missing economists’ expectations of a 2% decline. This drop, following an 8.4% slump in the first two months of 2025, reflects persistent weakness in domestic consumption. Notable declines included a 6.7% drop in iron ore imports to 94 million tons—the lowest since 2023—and a 36.8% plunge in soybean imports, the weakest since 2008. However, strategic sectors showed resilience, with semiconductor imports up 11.2% and crude oil imports rising 4.8%.
The import contraction underscores broader economic challenges, including deflationary pressures and a struggling housing market. Consumer prices contracted for the second consecutive month in March, while producer prices fell for the 29th straight month, according to recent data. These trends have fueled calls for more aggressive stimulus measures to bolster domestic demand and reduce reliance on exports.
Trade War Intensifies
The U.S.-China trade faceoff has escalated significantly in 2025. In addition to the 145% tariffs, the U.S. imposed a 20% duty tied to allegations of Beijing’s role in the fentanyl trade. China retaliated with tit-for-tat measures, including 15% levies on select U.S. goods and a 125% across-the-board tariff announced last Friday. However, the Trump administration granted temporary exemptions for electronics products like smartphones, computers, and semiconductors, offering a brief reprieve for global supply chains.
China’s Ministry of Commerce welcomed the move as a “small step” but urged Washington to fully repeal the tariffs.
“Trade policies remain highly uncertain, creating chaos for businesses adjusting supply chains,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “Even if firms relocate production, building new factories takes time, and we may see shortages in the U.S. that could drive inflation.”
Economic Outlook and Policy Response
China’s leadership has set an ambitious growth target of “around 5%” for 2025, a goal increasingly difficult amid trade disruptions and domestic headwinds. Goldman Sachs recently cut its growth forecast to 4.0%, citing the tariff impact, though it expects Beijing to intensify policy easing.
The upcoming first-quarter GDP release on Wednesday, April 16, and a Politburo meeting later this month are anticipated to unveil new stimulus measures aimed at boosting consumption and stabilizing the housing market.
“China’s export strength is a testament to its economic resilience, but the import decline highlights the need for domestic reforms,” said Zhang. “Stimulus will be critical to sustaining growth in this trade war environment.”
Besides being a domestic win, China’s export growth is sending a global message. U.S. ports are bracing for bottlenecks, and inflation whispers are growing louder across the Atlantic. Meanwhile, ASEAN and EU markets are reaping rewards as China redirects its trade flows, though it comes with growing economic concerns.