Iris Pang, economist at ING, notes that even though the outcome of the sideline meeting between President Trump and President Xi at the G20 meeting was a so-called truce, Chinese exporters continued to export goods earlier than planned to avoid a possible further increase in tariffs.

Key Quotes

“These front running export activities seem to have finally ended as exports fell 1.3% year on year in June after a small increase of 1.1% in May. It seems exporters have run out of goods to export to the US that could circumvent future tariffs. In June, China's exports to the US rose by a meagre 4.3% month on month after a 20% spike in May.”

“Given exporter's pessimistic outlook about future trading activities, imports contracted too - 7.3% YoY in June after falling by 8.5% a month ago - as exporters haven't imported many parts for future production. For 2H19, we believe exports and imports will continue to shrink.”