China's U.S.-bound shipments fall in July after brief recovery, survey shows

• June exports to the U.S. had surged 14%, contributing to overall Chinese export growth of 27% (the highest in nearly five years), driven by frontloading before anticipated summer tariffs
• Factory activity decelerated in July with manufacturing showing the worst employment performance, while retail sales fell both month-over-month and year-over-year
• The last previous decline in U.S.-bound exports occurred in March 2025, when they plunged over 26% year-over-year amid escalating trade tensions that began in April 2025

Summary

China's U.S.-bound shipments declined in July 2025 for the first time in several months, signaling weakening momentum in one of the Chinese economy's key growth drivers, according to a China Beige Book survey of 1,436 Chinese businesses conducted between July 20-28.

Key Developments:

The decline follows a brief recovery in June, when China's exports to the U.S. rose 14%, contributing to overall export growth of 27%—the strongest in nearly five years. This June surge was driven by businesses frontloading shipments ahead of anticipated higher U.S. tariffs and demand from AI-powered data center development.

Prior to the July downturn, the last monthly decline occurred in March, when U.S.-bound shipments plunged over 26% year-over-year, consistent with double-digit declines since trade tensions escalated in April 2025.

Broader Economic Weakness:

The survey revealed broader deterioration across China's economy:

• Manufacturing activity decelerated in July, with the sector experiencing the worst employment performance
• All surveyed sectors showed worsening job growth year-over-year
• Retail sales fell both month-over-month and year-over-year
• Travel and restaurant sectors experienced sharp annual downturns

Market Implications:

The findings underscore mounting challenges for China's economy and suggest the June export bounce may have been temporary. Chinese policymakers acknowledged these pressures Thursday, emphasizing the need to expand domestic demand.

Investors should monitor official trade data due August 7 and retail sales/investment figures expected August 17 for confirmation of these trends. The deteriorating export picture and weak domestic consumption point to continued economic headwinds for China.