China’s exports rose an annual 8.3% in September, customs data showed on Monday, compared to 4.4% growth in August and registering the fastest growth since March. The higher number is a good thing on the surface, but renewed threats of greater tariffs by Donald Trump have added another layer of doubt to the sustainability of the export increases.
The growing export numbers feel like an attempt at front-loading before new tariffs kick in, and it would be expected that at some point that the numbers will fall. At the same time, although it appears significant that Chinese export numbers are going up while its share of exports to the US has fallen, the only way they can do this is to apply heavy discounts to goods to generate demand from outside the US. And this will have a negative impact on Chinese manufacturers, as well as on employment levels and tax revenues for local governments.