China's Trade Growth Rebounds After Tariff De-Escalation, Offering A Boost To First-Half Growth

Summary

• External demand continues to support Chinese economic growth, as the first-half trade surplus surged to a new high of $586bn amid resilient export growth and a year-on-year contraction of imports.
• While tariffs continue to drag on exports to the US, June data showed a smaller contraction after the tariff de-escalation in May.
• Tomorrow's GDP data will likely show that net exports have been a solid contributor to growth in the first half of the year despite tariff flareups.

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By Lynn Song

Exports rebounded modestly in June

China's June export growth rebounded to 5.8% year on year from 4.8% in May. The growth was a little stronger than consensus, but broadly in line with our forecasts, and we saw a smaller tariff