China’s trade faces first setback since record-breaking highs

China’s trade has hit its first significant speed bump since May, with the latest data revealing a drop in cargo throughput at the nation’s ports. Last week, the number of containers processed fell to 6.2 million, marking a 7 per cent decline from the previous week and the lowest figure since the second week of May. This slowdown signals that the historic trade volumes seen in May and June, when over 30 million containers were processed per month, may be starting to lose momentum.

While May and June marked a high point for China’s trade, driven by a push to get ahead of US tariffs under US President Donald Trump’s trade war, analysts suggest that this burst of activity may now be winding down. Tariff concerns, particularly the ongoing threat of 50 per cent duties on Chinese goods, continue to weigh on trade as the US negotiates deals with other global partners, such as the European Union and Japan.

Impact of US-China tariffs on exports and imports

China’s trade with the US has been significantly impacted by the tariff uncertainty, especially in the first half of 2025. The US imposed various tariffs, including rates of up to 145 per cent at one point, reducing the volume of Chinese goods entering the US. In response, countries like those in ASEAN and the EU have become increasingly important trading partners, mitigating the losses in the US-bound shipments.

Despite the decline in exports to the US, domestic trade has remained resilient. According to the Ministry of Transport, China’s ports handled a total cargo throughput of 8.9 billion tonnes in the first half of 2025, a 4 per cent year-on-year increase. Domestic logistics rose by 5 per cent, while foreign trade grew by 1.8 per cent. The growth in container throughput, which reached 170 million TEU (twenty-foot equivalent units), up 6.9 per cent from the previous year, suggests that China’s domestic economy is largely sustaining itself amid global uncertainties.

Geopolitical tensions and the broader impact on logistics

Alongside the tariff-induced slowdown, China’s broader logistics sector continues to show resilience. The total value of social logistics in the first half of 2025 grew by 5.6 per cent to reach 171.3 trillion yuan ($23.86 trillion), highlighting the strength of domestic demand. Industrial logistics, in particular, rose by 5.8 per cent, driven by strong demand in sectors like high-tech manufacturing and equipment production. The rebound in bulk commodity imports, such as crude oil and semiconductor chips, further indicates a diversified and robust logistics ecosystem.

However, the ripple effects of tariff uncertainties remain, especially in light of the US potentially imposing new tariffs. The slowdown in cargo throughput and shifting global trade patterns suggest that China's trade landscape is evolving, with the longer-term impact of tariff policies still unfolding.