China’s exports likely fell further in August as trade tensions rise, according to a Reuters By Reuters poll

By Ethan Wang and Joe Cash

BEIJING (Reuters) – China’s exports grew at perhaps the slowest pace in four months in August as falling global demand and rising trade barriers threaten to dim a bright spot in the world’s second-largest economy.

Trade data on Tuesday is expected to show outbound shipments rose 6.5 percent from a year in value, according to the median forecast of 34 economists in a Reuters poll, down from a 7.0 percent pace recorded in July.

Inbound shipments likely rose 2% last month, a sharp drop from July’s 7.2% rise, which was boosted by a weak base from a year earlier and a rush to stockpile tokens ahead of limits technologies expected from the US.

South Korea, a leading index of China’s technology imports, saw slower growth in exports to China in August after rising to a 21-month high in July.

The likely underwhelming August data adds to a raft of recent economic indicators that suggest China is struggling to regain momentum after a difficult start to the second half of the year.

Manufacturing activity contracted for a sixth straight month in August, with factory-gate prices falling to their worst level in 14 months.

Moreover, the expected slowdown in imports highlights weak domestic demand as the economy is weighed down by a prolonged downturn in the housing market and increasing job insecurity.

Analysts believe the economy could regain ground in the rest of the year as fiscal spending picks up and exports retain some resilience.

However, significant risks remain, with escalating trade tensions and initial tariff hikes casting a shadow over growth prospects.

Canada last month announced a 100% tariff on Chinese electric vehicle imports, joining the US and European Union in tightening trade measures against China.

In Asia, India’s Ministry of Steel is pushing for increased tariffs on steel imports from countries such as China, while Malaysia has launched an anti-dumping investigation into plastic products from China and Indonesia.

“The peak of Chinese export dynamism is likely over,” Oxford Economics said in a recent note, warning that price supports could disappear once the tariffs take effect.

China’s August trade surplus is forecast at $82.05 billion, according to the survey, down slightly from $84.65 billion in July.