FX.co ★ China's exports on rise despite US tariffs

China's exports rebounded surprisingly in May despite the fact that the US raised tariffs. On the flip side, imports hit a low in almost three years which indicates weak domestic demand. It may prompt Beijing to step up stimulus measures.

China’s exports climbed 1.1% in May year-on-year, customs data showed. Analysts had expected a slight decrease. "We expect export growth in June, likely supported by continued front-loading of US-bound exports, but it should then tumble in the third quarter, when we expect the threatened tariffs to be imposed", economists at Nomura said.

They anticipate Beijing will likely expand its stimulus measures to stabilize financial markets and GDP growth.

Though China is less dependent on export sales nowadays, they still account for almost a fifth of GDP.

Chinese imports in May were much weaker than expected, falling by 8.5% and showing the sharpest drop since July 2016. Analysts had forecast a more moderate decline by 3.8%.

That left the country with a trade surplus of $41.65 billion in May.