Core Viewpoint - The ongoing high tariffs between the US and China are likely to exacerbate shortages of daily necessities in the US, while also negatively impacting China's economy due to declining export revenues [1][3]. Group 1: Export Trends - In April, China's exports to the US saw significant declines across various categories, with smartphones down 70%, game consoles down 45%, and thermos bottles down 40%, leading to an overall export decrease of 21% [2]. - The decline in exports is particularly pronounced in household appliances and daily necessities, which are heavily reliant on Chinese imports, accounting for 80-90% of the US market [1][2]. Group 2: Tariff Impact - The US and China agreed to lower tariffs by 115% on May 14, but the current tariff rates remain higher than those before the Trump administration [1][3]. - If high tariffs persist, there is a risk of further shortages and price increases for daily goods in the US, which could lead to a significant economic impact on China as well [3][4]. Group 3: Economic Projections - Estimates suggest that if the current 30% tariffs remain in place, China's exports to the US could decrease by 30% over the next two years, potentially lowering China's GDP by approximately 0.9% [4]. - The high tariff burden may squeeze corporate profits, reduce equipment investment, and lead to job losses in China, contributing to an overall economic slowdown [3][4].

Core Viewpoint - China's exports to the U.S. have significantly decreased, with a year-on-year decline of 21% in April, marking the largest drop since July 2023, primarily due to high tariffs imposed by the U.S. and retaliatory measures from China [1][2] Group 1: Export Trends - In April, China's exports to the U.S. amounted to $33 billion, reflecting a 21% decrease year-on-year, with the decline attributed to the 145% tariffs imposed by the U.S. and China's 125% retaliatory tariffs [1] - The export of key products to the U.S. has seen notable reductions, including a 20% decrease in smartphone exports and a 7% decrease in toy exports compared to the previous year [1] - Despite the decline in exports to the U.S., China has experienced an increase in exports to other regions, with exports to ASEAN rising by 21% and to the EU and Japan increasing by 8% [2] Group 2: Economic Impact - The decline in exports to the U.S. is expected to negatively impact China's overall economic growth, potentially reducing the growth rate by approximately 3 percentage points, leading to a projected growth rate of around 2% by the end of 2026 [2] - In April, China's imports from the U.S. also fell by 13.8% to $12.5 billion, marking two consecutive months of negative growth [2] - The World Trade Organization (WTO) forecasts a 4-9% growth in China's exports to regions outside the U.S., indicating a shift in trade dynamics [2] Group 3: Foreign Investment Concerns - Foreign direct investment (FDI) in China remains low, with net inflows of $14.7 billion in the first quarter of 2025, which is less than 20% of the peak levels seen in early 2022 [3] - The ongoing tariff competition between the U.S. and China is becoming a burden for foreign companies, leading to a noticeable decline in their operations within China [3] - Major companies, such as TOTO and General Motors, have announced significant reductions in their manufacturing capacities in China, indicating a trend of foreign firms reconsidering their investments in the country [3]