China's U.S. Exports Plunge 29% in November Amid Trade Truce, Highlighting Persistent Demand Weakness

China’s exports to the United States plummeted by 29% in November compared to the same month last year, according to official trade data, underscoring persistent weakness in bilateral trade despite the existence of a recent trade truce. This marks the third consecutive month of double-digit declines, highlighting that tariff-related headwinds and shifting supply chain strategies continue to weigh on U.S.-bound shipments. While China’s overall exports exceeded expectations, growing 6.2% year-on-year on strong demand from Southeast Asia, the Middle East, and Latin America, the divergence in regional performance reveals a deepening decoupling in trade flows. The data suggests that Chinese manufacturers are increasingly reallocating production and export volumes to non-U.S. markets, driven by both geopolitical risks and evolving U.S. import policies. Key sectors most affected include technology and industrial goods, where demand from U.S. consumers and businesses remains subdued. The energy sector, particularly crude oil and petrochemical exports, also saw muted growth, with USD/CNY exchange rates hovering near 7.25, reflecting cautious investor sentiment toward Chinese assets. Equity markets responded with caution: the SHCOMP index dipped 0.8%, while the SPX and XLK declined 0.5% and 0.7% respectively, indicating investor concerns over global trade fragility. The sharp drop in U.S.-bound exports may pressure Chinese industrial output and impact multinational firms with significant exposure to China’s manufacturing base, especially in consumer discretionary and industrial sectors. Investors monitoring XLE and other commodity-linked equities are also watching for signs of broader demand contraction.