China’s Exports Rise 5.8% in June 2025, Beating Forecasts Amid Rare-Earth Breakthrough and Easing Tariff Pressure

China’s export sector posted stronger-than-expected growth in June 2025, with outbound shipments rising by 5.8% year-on-year to USD 325.2 billion, slightly above consensus forecasts of a 5.0% increase. The latest data, released by China’s General Administration of Customs, reflects an acceleration from May’s 4.8% growth rate and signals resilience in Chinese trade performance amid a complex geopolitical and policy landscape. The figures mark a continued rebound from the export slowdown seen in 2023 and early 2024, supported by a brief window of easing trade pressure and significant progress in reopening global supply chains—particularly for rare-earth elements.

The headline boost in exports was partially driven by a temporary de-escalation of trade tensions. June saw a lull in tariff activity ahead of the August 2025 tariff reset deadline, which gave exporters room to clear inventories and expedite overseas shipments. This was particularly evident in strategic sectors such as rare-earth metals, where export volumes surged 32% month-on-month, aided by the restoration of trade pathways following the US–China rare-earth accords signed in mid-June. The agreements rolled back key restrictions China had imposed in April during the peak of retaliatory trade escalation, which had disrupted global supply chains and halted production at several U.S. and European auto factories that depend on rare-earth inputs for electric motors and battery systems.

The easing of rare-earth export controls represents not just a trade victory but a broader signal of pragmatic cooperation between Beijing and Washington in a strategically vital sector. While overall exports to the United States fell sharply by -16.1% year-on-year, this rare-earth development suggests the groundwork for selective supply chain normalization, especially in areas where mutual dependence is structurally embedded. In contrast, China recorded robust export growth to other key markets: shipments to the European Union rose by 7.6%, to Japan by 6.6%, and to Taiwan by 3.4%, indicating regional resilience in East Asia and ongoing alignment with non-U.S. industrial demand.

Across product categories, exports of agricultural goods rose 1.8%, while fertilizer shipments surged 25.9%, reflecting continued demand from emerging markets and a push by Chinese exporters to diversify away from overexposed electronics segments. Textile exports, a barometer for light manufacturing, also edged up by 1.8% year-on-year, suggesting steady demand from Southeast Asia and Latin America. For the first half of 2025, total exports reached USD 1.81 trillion, representing a 5.9% increase compared to the same period in 2024. The data confirm that China is maintaining moderate trade momentum despite external headwinds, including tariff uncertainty, geopolitical risk, and persistent sluggishness in advanced economies.

Despite the upbeat headline, the sharp contraction in exports to the United States is a structural concern. U.S. importers appear to be actively de-risking their supply chains, substituting Chinese inputs with goods from Mexico, Vietnam, and India. The ongoing reconfiguration of global trade networks—accelerated by both policy and private-sector decisions—will likely prevent a return to pre-2018 levels of U.S.–China bilateral trade, even as selective cooperation resumes in niche areas like rare earths, semiconductors, or green technologies.

Currency dynamics also played a role in supporting June’s export performance. The Chinese yuan weakened modestly, hovering around 7.25 per U.S. dollar during the month, improving export competitiveness. Analysts from Nomura and ING have suggested that the People’s Bank of China (PBoC) may tolerate a slightly weaker yuan in the near term as long as capital outflows remain contained and inflation pressures subdued. This FX flexibility offers Chinese exporters a buffer against external price pressures and helps preserve market share, especially in price-sensitive categories such as machinery, base metals, and consumer electronics.

Looking forward, the outlook for Chinese exports remains cautiously optimistic but heavily conditional on geopolitical developments. The August tariff deadline imposed by the U.S. Trade Representative’s office is seen as a potential inflection point: if additional tariffs are imposed or existing ones reinstated, the current export momentum could stall or reverse. Conversely, a broader détente in trade relations could reinforce current gains and sustain export growth into the fourth quarter.

In conclusion, China’s 5.8% export growth in June 2025 marks a solid upside surprise and reflects effective leveraging of temporary trade calm, rare-earth diplomacy, and regional diversification. However, the persistent decline in U.S.-bound shipments underscores the deeper structural decoupling underway. As China seeks to sustain its external trade strength, its strategy will need to balance tactical concessions (like easing restrictions on critical minerals) with long-term diversification into emerging markets, high-value sectors, and regional supply chain integration.

Sources

General Administration of Customs, PRC. (2025). Monthly Foreign Trade Statistics – June 2025.

Ministry of Commerce, China. (2025). US–China Rare-Earth Agreement Summary Briefing – June 2025.

Bloomberg. (2025). China’s Rare-Earth Export Surge Eases Global Supply Fears.

Reuters. (2025). US Imports from China Fall as Trade Realignment Accelerates.

Nomura Global Markets. (2025). Asia FX Outlook – Q3 2025.

ING Research. (2025). China Trade and Currency Strategy Update – July 2025.