China’s export growth is expected to ease from June’s blistering pace, but strong global demand for AI-related goods and front-loaded shipments ahead of higher US tariffs could keep trade growth robust.
China’s exports are likely to have remained remarkably resilient in July even as growth cooled from the previous month’s sharp surge, highlighting how external demand continues to provide a crucial cushion for the world’s second-largest economy.
A Reuters poll of 35 economists expects China’s exports, measured in US dollar terms, to have risen 22.2 per cent year-on-year in July, compared with a 27 per cent jump in June. Imports are forecast to have increased 27.9 per cent, also slowing from June’s 36 per cent surge.
The moderation may look significant, but the underlying numbers still point to strong trade momentum at a time when China’s domestic economy is showing signs of weakness.
What is keeping China’s exports strong?
One of the biggest drivers is the global artificial intelligence investment boom. Rising spending on AI infrastructure has supported demand for Chinese electronics and other technology-linked goods, providing exporters with a powerful source of overseas demand.
Another factor is front-loading. Chinese exporters and US importers have been rushing to move goods before higher American tariffs take effect or additional trade restrictions are imposed.
The US imposed a new 12.5 per cent tariff on Chinese imports on July 24, after a temporary 10 per cent levy expired. With the possibility of further tariffs linked to Washington’s investigation into excess industrial capacity, companies have an incentive to accelerate shipments rather than risk paying higher duties later.
More from BusinessWhy could July exports still slow?
Part of the slowdown could simply reflect the exceptionally strong comparison with June. But weather-related disruptions may also have played a role.
Extreme weather, including typhoons, likely disrupted port operations and shipping activity during July, according to analysts. That could have weighed on both exports and imports.
The expected slowdown also comes as broader indicators suggest the Chinese economy lost some momentum entering the second half of the year. Official figures showed manufacturing activity contracted in July, while services and construction also weakened as demand softened.
China’s huge trade surplus remains in focus
China is nevertheless expected to record another massive trade surplus. Economists forecast the surplus at around $107 billion in July, compared with $125.62 billion in June.
China’s trade surplus exceeded $1 trillion last year, increasingly becoming a source of friction with Western economies concerned about trade imbalances and Chinese industrial overcapacity.
That creates a potential vulnerability for Beijing. The stronger China’s export machine becomes, the greater the possibility that trading partners respond with tariffs or other barriers — potentially challenging the very export momentum currently helping offset weakness at home.
Why the July trade data matters
The numbers, due from China’s customs agency on Friday, will provide an important early indication of how the economy is performing in the second half of 2026.
China faces an unusual economic divide: exports remain powerful while domestic demand remains fragile.
Beijing has signalled additional support. At its late-July meeting, the Politburo pledged faster fiscal spending and timely adjustments to monetary policy. But policymakers stopped short of announcing major consumer-focused stimulus or broader structural reforms.
That makes exports even more important to China’s growth story. July’s expected moderation therefore may not necessarily signal weakness. The bigger question is whether China can sustain its export boom if tariff pressures intensify and the temporary boost from front-loaded shipments begins to fade.
