China's seemingly inexorable march toward a $1.2 trillion goods surplus (customs data) continues. The July monthly surplus was a bit below $100b, but still up about $15 billion compared to July 2024. 1/

Higher US tariffs are having an impact on bilateral trade (the US and Chinese data agree on the trend tho not the level of trade) ... 2/

China tho has made up for the fall in direct exports to the US through increased indirect exports (parts to Asia for final assembly for the US market) and higher direct exports to the EU ... 3/

China's goods surplus with Europe is rising (exports are up, imports from Europe are down) but the big swing has come in China's trade with the emerging world 4/

Some of that swing is real, and a function of lower oil prices and rising Chinese exports to countries like Saudi Arabia. Some is a function of exporting goods to SE asia to meet US demand while avoiding the large tariffs on direct trade. 5/

China's surplus is so large that it now runs significant surpluses with everyone who doesn't supply China with high end chips ... 6/

7% july export growth (in USD terms) was a function in part of the low base in last July, but also a continued nominal increase even as export price deflation pulls down the nominal growth figures. Real growth (in export volumes) is likely a bit higher 7/

There are perhaps a few signs of export growth deceleration at the margins -- but there is no doubt that exports are still growing faster than both global trade and the Chinese economy ... 8/8