China's May shipments to U.S. clock 5-year high growth at 35% as overall exports jump on tech boost

China’s trade growth outperformed expectations in May, with overall exports rising 19.4% year-over-year in U.S. dollar terms, accelerating from April’s 14.1% gain, according to customs data. Economists had forecast a 15% increase, but surging demand for AI-related technology and green exports—including electric vehicles, batteries, and solar products—helped offset economic pressures from the Iran war. Shipments to the U.S. climbed nearly 35.4%, the highest growth since March 2021, reversing declines tied to former President Donald Trump’s tariffs. Integrated circuit exports soared 110% in value, while high-tech goods exports jumped 50% year-over-year, reflecting strong global demand for semiconductors. Imports also rose sharply, up 47% in May, contributing to a $105.4 billion trade surplus. However, import growth has outpaced exports in early 2026, with a 24.5% year-over-year increase compared to 15.5% for exports, narrowing the surplus from last year. Analysts noted that stockpiling by overseas buyers—fearing rising energy costs—temporarily supported exports, though this momentum may fade. Domestic consumption remains weak, with retail sales growth expected to stall due to reduced trade-in subsidies. Economists at Bank of America warned that the export boom does not signal a trade rebalancing, as domestic demand and policy stimulus remain insufficient. China’s economic recovery has slowed after a strong first quarter, with industrial production and retail sales weakening in April. Manufacturing activity also dipped in May, though it remained above the 50 contraction threshold. Despite export gains, analysts like Xiangrong Yu at Citi Bank cautioned that domestic demand risks further weakening, potentially offsetting the AI-driven trade tailwind. Tariff advantages for Chinese exports over Southeast Asian rivals have also narrowed, reducing competitive pressures. Any new tariffs under Trump’s Section 301 review would likely be smaller than those on competitors, further aiding Chinese manufacturers. However, the long-term outlook depends on sustained global demand and domestic policy adjustments to support faltering consumption.