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

• The last time China's U.S. exports fell was in March 2025, when they plunged over 26% year-over-year, consistent with double-digit declines since trade tensions escalated in April 2025
• Factory activity decelerated in July with manufacturing showing the worst employment performance, as all surveyed sectors saw job growth worsen from a year ago
• Retail sales fell both month-over-month and year-over-year in July, with travel and restaurants experiencing a 'sharp on-year downturn', prompting Chinese policymakers to emphasize expanding domestic demand

Summary: China's U.S.-Bound Shipments Decline in July After Brief Recovery

Key Findings

China's exports to the United States fell in July 2025 for the first time in several months, according to a China Beige Book survey of 1,436 Chinese businesses conducted between July 20-28. This marks the end of a brief rebound following months of decline.

Critical Data Points

• June 2025: China's U.S.-bound shipments surged 14%, contributing to overall export growth of 27%—the strongest in nearly five years
• March 2025: Exports to the U.S. plummeted over 26% year-over-year
• The June spike was driven by businesses frontloading shipments ahead of anticipated higher U.S. tariffs and robust demand from AI-powered data center development

Broader Economic Implications

The survey reveals weakening economic momentum across multiple sectors:

• Manufacturing: Factory activity decelerated with employment showing the worst performance among all sectors surveyed
• Retail: Sales declined both month-over-month and year-over-year in July
• Services: Travel and restaurant sectors experienced sharp year-on-year downturns

Policy Response

In response to deteriorating conditions, Chinese policymakers emphasized the need to expand domestic demand on Thursday, signaling concern about export dependence amid ongoing trade tensions that escalated in April 2025.

Upcoming Data

Official trade data for July is scheduled for release on August 7, with retail sales and investment figures expected on August 17, which will provide confirmation of the survey's findings.

The decline suggests the export-driven recovery may be unsustainable, raising questions about China's economic stability amid persistent U.S.-China trade tensions.