Chinese exports to UK rise 16% as firms seek to avoid US tariffs
What happened
In May, Chinese exports to the UK surged by 16.1% compared with the previous year, marking the highest monthly level since February 2022. This boost comes as Chinese firms redirect goods, especially electronics and small parcels, towards the UK to dodge steep 55% US tariffs, instead of shipping them to the US, where exports to that market fell 34% in the same month.
Why – China and the US have agreed to a temporary trade truce, but tariffs on most Chinese goods entering the USA remain at 55%. Imports to the US from most other countries are subject to a 10% tariff.
What next
UK policymakers have welcomed the influx of cheaper imports, saying it could help ease inflation, though some domestic industries warn of being undercut by cheap goods. The government is launching a six-week consultation on protective measures, such as quotas or trade remedies, to defend vulnerable sectors like steel. Chancellor Rachel Reeves has also pledged to review the duty‑free parcel threshold to ensure a level playing field.
Tariff impact for US – Federal Reserve chair Jerome Powell says Trump’s tariffs are expected to boost inflation. He cited the policy as the reason interest rates were unlikely to come down anytime soon.
Tariff impact for UK – Bank of England governor, Andrew Bailey, says the future path for interest rates in the UK is more uncertain due to the on-off tariffs.
Trade war continues – The much higher tariffs were paused for 90 days until 9 July as trade negotiations continue, however, trade has taken a back seat amid the Israel-Iran conflict.
