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China’s exports in October declined for the first time in nearly two years as businesses’ front-loading momentum tapered off and trade tensions with the U.S. escalated during the month before the two countries reached a deal.

Outbound shipments dropped 1.1% in October in U.S. dollar terms from a year earlier — their first contraction since March 2024 — disappointing economists’ expectations for 3% growth in a Reuters survey, and compared with a six-month high of 8.3% in September.

Imports rose 1% last month, missing the estimates for 3.2% growth, as a prolonged housing market downturn and weak job market conditions continued to weigh on consumer demand. They had jumped 7.4% in September.

Chinese exporters and American buyers breathed a sigh of relief last week after U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, struck a deal during their meeting in South Korea, de-escalating a situation that had threatened to plunge bilateral relations into a full-blown trade war.

The two countries agreed to roll back a range of punitive measures, including steep tariffs, export controls for critical minerals and advanced technology, while Beijing committed to buying more U.S. soybeans and working with Washington to crack down on fentanyl flows.

Following the trade truce, the effective U.S. tariff rate on Chinese exports dropped to 31%, according to Macquarie Group’s estimates.

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