### China's Export Landscape: A Struggle Amidst Tariffs and Deflation China's export growth has faced significant challenges in May 2025, with factory-gate deflation reaching its worst level in two years. The overall export growth was reported at 4.8%, a decline from the previous month's 8.1% increase, primarily driven by a sharp decrease in shipments to the United States, which fell by nearly 35% [https://www.newindianexpress.com/business/2025/Jun/09/china-says-its-exports-to-the-us-fell-35-in-may-as-trade-talks-are-due-to-start-in-london][https://www.bnnbloomberg.ca/tariffs/2025/06/09/china-says-its-exports-to-the-u-s-fell-35-in-may-as-trade-talks-are-due-to-start-in-london]. This downturn comes as trade talks between China and the U.S. are set to commence in London, highlighting the ongoing tensions in Sino-U.S. trade relations [https://www.devdiscourse.com/article/headlines/3451986-china-trade-tensions-deepen-as-export-growth-slows]. ### Breakdown of Current Export Dynamics 1. **Export Growth Rate**: - China's exports rose by 4.8% in May compared to the previous year, a slowdown from April's 8.1% increase [https://www.business-standard.com/world-news/china-s-exports-up-4-8-in-may-as-shipments-to-us-fall-nearly-10-125060900148_1.html]. 2. **Impact of U.S. Tariffs**: - Shipments to the U.S. saw a drastic decline of approximately 35%, marking the sharpest drop in over five years [https://www.nbcdfw.com/news/business/money-report/china-exports-growth-misses-expectations-despite-tariff-truce-imports-plunge-amid-weak-consumption/3858938]. 3. **Deflationary Pressures**: - Factory-gate deflation has deepened, indicating broader economic challenges within China [https://www.reuters.com/world/china/chinas-may-exports-slow-deflation-deepens-tariffs-bite-2025-06-09]. ### Supporting Data and Evidence - **Export Growth Figures**: - May 2025: 4.8% increase in exports year-on-year. - April 2025: 8.1% increase in exports year-on-year. - Decline in U.S. shipments: 35% drop in May 2025 [https://www.devdiscourse.com/article/business/3451853-chinas-trade-dynamics-exports-rise-amid-us-challenges][https://www.devdiscourse.com/article/headlines/3452136-chinas-export-struggles-amid-u-s-tariffs]. - **Economic Indicators**: - Factory-gate deflation at its worst in two years, reflecting deeper economic issues [https://www.reuters.com/world/china/chinas-may-exports-slow-deflation-deepens-tariffs-bite-2025-06-09]. ### Conclusion: Navigating a Complex Trade Environment In summary, **China's export growth is currently hindered by significant declines in shipments to the U.S. and deepening deflationary pressures**. The following points encapsulate the situation: 1. **Export Growth Decline**: A notable slowdown in export growth from April to May, with a current rate of 4.8%. 2. **U.S. Trade Relations**: A substantial drop in exports to the U.S. by 35%, exacerbating trade tensions. 3. **Economic Challenges**: Ongoing deflationary trends signal deeper economic issues that China must address. As trade talks loom, the outcomes will be critical in determining the future trajectory of China's export dynamics and overall economic health [https://www.devdiscourse.com/article/headlines/3451986-china-trade-tensions-deepen-as-export-growth-slows].