"Strong Chinese Exports Despite US Tariff Policy"

On May 12, iM Securities analyzed that, despite the United States imposing high tariffs on China, Chinese exports have continued to perform well due to the strengthening of low-cost exports, particularly to emerging markets. The company also cited the effects of the Trump administration's postponement of high reciprocal tariffs and the impact of export volumes ordered before the announcement of reciprocal tariffs as additional reasons.

According to iM Securities, as a result of the high tariffs, China's export growth rate to the United States in April plummeted by 21% year-on-year. However, the overall export growth rate reached 8.1%, not only recording positive growth but also significantly exceeding the market expectation of 2.0%.

Park Sanghyun, a researcher at iM Securities, explained, "The reason why Chinese exports remained robust in April, despite a sharp decline in exports to the United States, is clearly because exports to other countries and regions were better than expected." He added, "China is offsetting the decrease in exports to the United States by expanding exports to emerging markets, particularly those in ASEAN."

However, iM Securities predicted that if there is no compromise between the United States and China, export deterioration is likely to occur. He stated, "There is still a latent possibility that the negative effects of reciprocal tariffs will materialize with a time lag." He further explained, "If the United States maintains its high-tariff policy on countries that serve as intermediaries for Chinese exports, or if the high tariffs cause the U.S. economy to enter a truly severe recession, it is clear that the global trade cycle, including China, will be significantly disrupted."

Park Sanghyun, a researcher at iM Securities, emphasized, "The number of tariff agreements reached with various countries before the 90-day reciprocal tariff grace period ends, as well as the extent to which the average tariff rate declines, will likely determine the direction of global trade." He also stressed, "Tariff negotiations with China are an important variable not only for Chinese exports but also for the global trade flow."