Sino-US trade rebounds 3 months as new relations framework takes hold
**China's customs chief confirmed bilateral trade with the US turned from decline to growth in April, with volumes expanding through June as a recalibrated diplomatic framework stabilized commercial expectations.**
Sino-US trade reversed a months-long contraction in the second quarter, with imports and exports turning positive in April and expanding through June, Chinese Customs Administrator Sun Meijun said Wednesday, attributing the shift to a "new positioning" of bilateral relations that has provided stable expectations for commerce.
"The new positioning of Sino-US relations provides stable expectations for Sino-US and international economic and trade development," Sun Meijun, Administrator of the General Administration of Customs, said at a State Council Information Office press conference in Beijing.
The turnaround follows a period of severe contraction. US-China bilateral trade fell 16.6 percent to $128.68 billion in the first quarter of 2026, according to customs data, after the second Trump administration imposed tariffs that reached levels threatening to sever commercial ties between the world's two largest economies. A 90-day tariff ceasefire agreed in May 2025 and extended through November 2026 at the Davos forum helped restore some predictability, though the current average US tariff on Chinese goods remains at elevated levels.
The rebound matters beyond the bilateral relationship. China and the US together account for roughly 40 percent of global GDP, and stable trade flows between them underpin supply chains spanning electronics, machinery, chemicals, and consumer goods. If the current trajectory holds through the November 2026 ceasefire deadline, it could signal a durable de-escalation — but any breakdown in talks would risk renewing the contraction that erased more than $25 billion in quarterly trade.
The customs data aligns with broader shifts in China's trade architecture. While Sino-US flows contracted in early 2026, China's trade with the Association of Southeast Asian Nations grew 18.4 percent and with the European Union 17.6 percent, according to first-quarter figures, reflecting a diversification strategy that reduces dependence on any single market. Yet the US remains China's third-largest trading partner, and the complementary nature of the two economies — China as the world's manufacturing hub, the US as its largest consumer market — means full decoupling carries prohibitive costs for both sides.
**Chinese Firms Show Resilience, Caution**
A 2026 survey by the China General Chamber of Commerce in the USA found that 79 percent of Chinese firms operating in America reported negative tariff impacts on their operations, with 39 percent citing rising import costs and 27 percent margin compression. Despite this, 81 percent remained profitable and 73 percent maintained their investment levels — a sharp increase from 53 percent the prior year. Record reinvestment intentions, with 79 percent of firms planning to reinvest in the US market, underscore long-term commitment even as geopolitical uncertainty remains the top obstacle cited by 82 percent of respondents.
The data also reveals a polarization among Chinese firms. Those with EBIT margins above 15 percent doubled to 21 percent of the total, the highest level in the survey's history, while 27 percent experienced revenue declines. This suggests that companies with competitive advantages — particularly in pricing and quality — are navigating the tariff environment more effectively, while weaker players face mounting pressure.
**What Comes Next**
The November 2026 deadline for the current tariff ceasefire looms as the next inflection point. Carlos Gutierrez, former US Secretary of Commerce, has said that if both sides establish a framework for coexistence, it could serve as a model for the global trading system. But structural tensions remain: the US continues to pursue semiconductor export controls and technology decoupling, while China has accelerated domestic substitution in critical components.
For markets, the trajectory of Sino-US trade will influence everything from container shipping rates to semiconductor equipment orders to emerging-market currency stability. A sustained recovery would support risk appetite across Asian equities and export-oriented sectors globally. A relapse into tariff escalation would renew supply-chain disruption fears and likely push the yuan weaker against the dollar.
*This article is for informational purposes only and does not constitute investment advice.*
Portfolio
Edgen Stock·Jul 22 2026, 01:41
