china's exports defy trade war, surge in march
Beijing, Monday, 14 April 2025.
Despite escalating trade tensions, China’s exports soared by 12.4% in March. Simultaneously, imports declined by 4.3%. This surprising export boom, especially in smartphones and electronics, has created a trade surplus of $102.6 billion. The shift in trade dynamics could significantly impact global semiconductor demand. Giants like NVIDIA and TSMC may feel the reverberations. Retaliatory tariffs from both China and the U.S. add complexity. Some analysts predict supply chain chaos and rising inflation due to the trade war.
trade data and expert analysis
China’s March exports demonstrated a robust 12.4% year-on-year increase, surpassing estimates of 4.4% [2]. However, imports experienced a 4.3% decline, diverging from the anticipated 2% decrease [2]. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, anticipates a potential weakening of exports in the coming months due to escalating U.S. tariffs [2]. Zhang also suggests that supply chain disruptions and potential shortages in the U.S. could lead to increased inflation [2].
tariff escalations and retaliatory measures
The trade tensions between the U.S. and China have intensified, marked by escalating tariffs [2]. The U.S. has imposed cumulative tariffs of 145% on imports from China since January, which includes a 20% duty related to Beijing’s role in fentanyl trade [2]. China has retaliated by increasing tariffs, including 125% tariffs on U.S. goods that took effect on April 11, 2025 [2]. Lingjun Wang, the vice head of customs administration, criticized the “abusive use of tariffs,” noting they have created obstacles for global trade [2].
impact on semiconductor industry
The surge in China’s exports, particularly in electronics, casts a spotlight on the semiconductor industry [1]. Semiconductors are vital components in modern technology, powering devices ranging from smartphones to spacecraft [7]. China is actively seeking to strengthen its domestic semiconductor industry [7]. Initiatives include amending “place of origin” rules to favor local manufacturers and launching a new AI fund with US$8 billion allocated for early-stage projects [7]. These actions could influence the competitive landscape for companies like NVIDIA and TSMC [1].
economic forecasts and policy responses
Chinese leadership has set an ambitious annual growth target of “around 5%” [2]. Several investment banks have revised their economic forecasts for China [2]. Goldman Sachs now projects China’s economy to grow by 4.0% this year, a 0.5 percentage point decrease from its previous forecast [2]. The Politburo is expected to convene later this month to discuss potential stimulus measures [2]. These measures aim to address concerns about weak domestic consumption, as indicated by recent consumer price contractions [2].