China’s exports dropped 1.1% in October 2025, representing its first monthly contraction since March 2024. The surprise contraction in exports, in U.S. dollar terms, was due to a steep 25% fall in exports to the United States and poured cold water on market optimism about progress toward a trade deal between the world’s two largest economies after both agreed to refrain from any further escalation of tit-for-tat tariffs. Economists had expected a 3% increase, but the drop brought to an end months of expansion that helped underpin the Chinese economy in earlier months.
A number of factors contributed to the decline this time including a tough comparison from October a year earlier when exports had surged after pre-shipments in anticipation of U.S. tariffs, worsening trade tensions early October where threats of more tariffs resurfaced and hesitant international buyers waiting to see how U.S.-China trade relations would play out. Imports into China also moderated, rising just 1 percent versus expectations of more than 3 percent as a slowing housing market and soft consumer spending discouraged new purchases.
Despite those headwinds, China and the United States reached a deal in recent days to roll back some punitive trade measures, including tariffs and export controls on critical minerals that potentially could stabilize trade flows from here. The trade surplus was about $90 billion in October, a little lower than previous months. Economists are predicting that China’s export growth will stabilize now that many trade tensions and restrictions have abated, but the data suggests there are still obstacles in global demand and the broader economy as 2025 draws to a close.
China’s Export Decline in Detail
China outbound October’s contraction in exports accelerated to -1.1%Y/y in USD terms, from a downwardly revised +8.3%Y/y (was +9.3%) recorded in September 2019 – first contraction since March 2014. This decrease was largely due to a 25 percent drop in shipments to the United States, which has served as one of China’s largest destinations for goods. The drop, which was not expected by economists, who had been forecasting an increase instead of a decrease.
This drop was partly because of the “high base effect,” which happened when exports in October of last year went up sharply because manufacturers sent out more goods early in case tariffs went up under the previous U.S. administration. This front-loading messed up comparisons between years, making the numbers for 2025 look worse.
Trade Tensions and Market Uncertainty
The increase of U.S. – China trade tensions in early October 2025 was also a major factor behind the export drop. The United States warned it could levy a 100% tariff on Chinese goods after China tightened export controls on rare earth materials. Much of this had global buyers waiting to see the result of trade talks, with orders getting pushed back or downsized. Each country, in turn, said it would roll back some tariffs and trade controls — easing tension between the world’s two largest economies but also causing an immediate reduction in export demand.
Imports and Domestic Demand
China’s imports expanded by just 1% in October, well below September’s 7.4% increase and lower than predictions for growth of 3.2%. A slumping housing market and persisting softness in the job market held down consumer spending and business investment, restraining demand for imports. Consumption at home has continued to be weak, despite government spending policies aimed at spurring economic growth.
Outlook
The trade surplus in October was $90.07 billion, representing a slide from earlier in the year but still formidable. Many economists expect the situation to stabilize now that trade frictions have eased, but the slowdown points to challenges piling up from global trade pressures and uncertain economic conditions in many places. Late 2025 trade performance suggests that China has a cautious market mood, with the country adapting to new geopolitical and economic challenges.