China Export Growth Slows Amid New U.S. Tariffs

China's export growth is expected to decelerate to 22.2% year-on-year in July, down from 27% in June. According to a Reuters poll of 35 economists, the slowdown follows the decision by the Federal government of the United States to impose a new 12.5% tariff on Chinese imports on July 24, replacing a temporary 10% levy. The U.S. cited failures to curb forced labor as the reason for the increase.

Despite the deceleration, growth remains robust due to strong global demand for artificial intelligence-related goods. Businesses also frontloaded shipments to avoid the expected tariffs, contributing to a forecast trade surplus of $107 billion for July.

Internally, China faces economic headwinds, with domestic indicators showing contraction in construction, services, and factory activities. In response, the Politburo of the Chinese Communist Party pledged to accelerate fiscal spending and adjust monetary policy tools to support the economy, although no specific consumer-focused stimulus measures were announced.