Merchandise exports accelerate in July

Latest reading: Merchandise exports rose 7.2% annually in July, beating market expectations and following June’s 5.9% rise. Firms accelerating shipments ahead of the August implementation of U.S. “reciprocal” tariffs likely underpinned export growth. Exports to Asian economies surged even as sales to the U.S. slumped, suggesting some rerouting of U.S.-bound goods via Asia. Meanwhile, merchandise imports expanded 4.1% over the same month last year in July (June: +1.1% yoy), marking the strongest result since July 2024. As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 98.2 billion surplus in July (June 2025: USD 114.8 billion surplus; July 2024: USD 85.5 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 1155.7 billion surplus in July, compared to the USD 1143.0 billion surplus in June.

Panelist insight: On the relevance to China’s exports of U.S. reciprocal tariffs on dozens of trading partners, ING’s Lynn Song said: “While China continues to face some of the highest tariff rates, the relative disadvantage compared to many other economies has narrowed after reciprocal tariffs were imposed in August -- with tariffs rising from the 10% benchmark to 15-40% for many economies. This is a particularly important angle, as one of the main avenues for tariff impacts is through the substitution effect. While it has been proven that various Chinese exports have limited substitutability, a narrowed tariff differential could improve the competitiveness of Chinese exports lacking substitutes moving forward.”

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