China’s exports grew 2.3% on year in Jan-Feb, well short of estimates

China’s exports growth slowed more than expected at the start of the year, data from the customs authority showed Friday, as higher U.S. tariffs partly offset momentum in the country’s rare bright spot.

Exports in the January to February period rose 2.3% in U.S. dollar terms from a year earlier, significantly undershooting expectations of a 5% increase in a Reuters poll.

That marked the slowest growth since April last year when exports increased by just 1.5% on year, according to LSEG data.

Imports surprised markets by declining 8.4% year-on-year in the first two months of 2025, the sharpest fall since July 2023, LESG data showed. Analysts had expected imports to expand 1% year-on-year.

Chinese exporters have been rushing to front-load outbound shipments since late last year on anticipation of more tariffs as U.S. President Donald Trump returned to the White House.

Trump’s first round of 10% tariff hikes on Chinese goods took effect on Feb 4., followed by another 10% tariff increase kicking in just one month later, taking the cumulative levies to 20%.

China has retaliated with additional tariffs on select U.S. goods, including energy and agricultural products, while restricting exports of certain critical minerals that the U.S. needs.

The customs agency publishes combined trade data for the first two months due to the distorting effects from the typically slow-shipment season during Lunar New Year holidays, which fell in late January this year.

Despite the mounting tariff tensions, Chinese leadership this week set an ambitious growth target of around 5% this year while acknowledging the weak domestic demand by adjusting the inflation target to the lowest level in decades.

Pressure has been building on Chinese officials to release more forceful stimulus measures to prop up domestic consumption and the housing sector, while reducing the economy’s reliance on exports and investment.

Exports contributed nearly a quarter of China’s GDP last year, with the U.S. being the largest trading partner on a single-country basis.

As Trump started his second term, he ordered his administration to investigate Beijing’s compliance with a trade deal struck during his first presidency in 2020. The final result of the assessment will be delivered to Trump by April 1, potentially setting the stage for further tariff actions, economists said.

Since last year, Beijing has sought to boost consumption using trade-in subsidies to encourage purchases of select goods. Authorities in January expanded the trade-in program to include smartphones and more home appliances.

As part of an expanded fiscal package, Chinese leaders pledged at an annual parliamentary meeting this week an additional 300 billion yuan of ultra-long special treasury bonds for consumers’ subsidy support.