China's exports surged 5.8% in June compared to a year earlier, defying expectations and setting a brisk pace for global shipments as Chinese firms rushed to beat the next round of U.S. tariffs set to take effect in August. According to Chinese customs data released Monday, the country's rare earth exports soared 60.3% to a record high of 7,742 tons, as buyers scrambled to secure critical materials ahead of new trade restrictions. The positive trade figures boosted China's CSI 300 index by 0.22% and lifted sentiment across Chinese financial markets.
The robust growth in exports was driven primarily by strong demand from Southeast Asian countries and the European Union, with shipments to Southeast Asia climbing 16.8% and those to the EU rising 7.6% compared to the same period last year. Exports of integrated circuits, cars, and ships rose by 25.5%, 27.4%, and 11.9% respectively, while steel exports jumped over 10% to 9.7 million tons despite ongoing trade restrictions from the U.S., EU, Vietnam, and India targeting Chinese steel overcapacity.
China's trade surplus reached $114.7 billion in June, up from $103.2 billion in May, and overall trade surplus for the first half of 2025 stood at $585.96 billion-nearly 35% higher than the prior year. Imports rose 1.1% in June, the first increase this year, but missed economists' expectations of a 1.3% rise, reflecting persistent sluggishness in domestic demand. Notably, imports of soybean products and crude oil grew 10.4% and 7.4% respectively, with record purchases of Brazilian soybeans and a rebound in oil shipments from Saudi Arabia and Iran.
Despite the headline gains, exports to the United States fell 16.1% year-over-year in June, continuing a three-month decline. However, the drop was less severe than the previous month's 34% plunge, due in part to a temporary tariff truce between Beijing and Washington. U.S. President Donald Trump's 145% tariffs on Chinese goods and Beijing's retaliatory measures have battered bilateral trade. The latest truce, struck in Switzerland on May 12 and later refined in London, paused most new tariffs for 90 days but leaves a looming August 12 deadline for further negotiations.
Lingjun Wang, deputy director of Chinese customs, said at a Monday press conference that the Geneva and London agreements were "hard-won" and that both sides were moving to implement terms, including China's resumption of rare earth shipments and Washington's easing of export controls on select high-tech items. Wang emphasized, "Both countries should hold up the consensus reached by their leaders with concrete policies and actions."
U.S. Secretary of State Marco Rubio described his recent talks with Chinese Foreign Minister Wang Yi as "constructive and pragmatic," adding that the odds of a Trump-Xi Jinping summit were high. Still, Zichun Huang, China economist at Capital Economics, warned, "Tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices." Huang also cautioned that frontloading export orders ahead of the August deadline may fade, threatening export momentum in the second half of 2025.
