China in trouble over tariffs, imports and exports collapse: at two-year lows

China's imports fell 3.4% in May , official data showed, a much steeper decline than the 0.2% decline in April and the 0.8% decline economists had expected, due to weak demand and rising trade pressure in the world's second-largest economy. Chinese exports to the United States fell 12.7% in May from April, amid tariff turmoil. China exported $28.8 billion in goods to the U.S. last month , down from $33 billion the previous month, according to data released by China's customs agency.

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China's producer prices fell 3.3% year-on-year in May , slightly above expectations for a 3.2% decline and following a 2.7% decline in April. This marked the 32nd consecutive month of producer deflation and the steepest decline since July 2023, driven by rising external risks, uncertainty over US tariffs and persistent weakness in domestic demand . The cost of production materials fell at a faster pace (-4.0% vs. -3.1% in April), with the steepest declines in mining (-11.9% vs. -9.4%) and raw materials (-5.4% vs. -3.6%), while processing prices also fell further (-2.8% vs. -2.3%).

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