After all, he reasoned, China is reliant on the U.S. as its greatest export market and would have to reshape its entire economy if it didn’t agree to a deal.

So, despite wanting to rebalance trade with economic partners, Trump’s strong hand relied somewhat on the notion that Chinese businesses needed to keep selling to U.S. companies and consumers.

But as negotiations rumble on and evolve, that foundation has shifted. Data released Monday reveals Chinese exports to the U.S. fell by more than 34% in May 2025 when compared year on year.

Exports to the U.S. also dropped a little over 20% in April, signaling a conscious shift away from the reliable U.S. consumer toward other markets.

These new pockets of potential for Chinese exporters include Africa, where exports were up more than 30% in May year over year, and Canada, where exports are up 20% in May compared with the same month last year, per analysis from FX and international payments specialists Convera.

The diversification away from the U.S. for Chinese exporters could be interpreted as undermining Trump’s seat at the negotiating table in Beijing, said Convera’s lead FX and macro strategist, George Vessey.

He tells Fortune: “I think the data may be seen as undermining Trump’s position and ability to hurt China. Still, given the disinflationary impact this is expected to have on other countries, it raises the risk of the trade war escalating elsewhere with other countries forced to impose their own tariffs on China. 

“There was already growing evidence that China is successfully diversifying its trade relations, becoming less dependent on the U.S. as the destination of its manufactured goods. The share of the U.S. in overall Chinese exports has fallen from around 23% at the beginning of the century to 16%.”

He also provided a caveat to the data, saying: “It’s worth noting that Chinese exports to the U.S. always fall around the Chinese New Year (generally February) but usually rebound strongly by now. This year, the post–Chinese New Year rebound simply hasn’t happened. Although there was a surge in U.S. imports in Q1, nearly all came from Europe rather than from China.”

Reestablishing truce

The data may have come at a convenient time for Chinese officials, who are meeting with Trump aides to discuss a deal in London.

To recap, currently the tit-for-tat trade war between Beijing and Washington, D.C., has entered something of a truce, with Treasury Secretary Scott Bessent announcing a 90-day pause in May.

Both sides agreed to lower their rates by 115%, meaning Bejing faces a 30% tariff and the U.S. faces a 10% tariff.

As officials met in the U.K. this week, analysts had hoped for some further evidence about what an eventual deal would look like.

Instead, they received a reiteration of the truce already announced and a framework with little detail about future proceedings.

President Trump said that a deal was “done,” pending sign-off from President Xi. Rare earth magnets would be “upfront” in the agreement, he added, leading some to speculate that the U.S. had agreed to commitments such as letting Chinese students into its universities.

As Deutsche Bank’s Jim Reid wrote in a note sent to Fortune this morning: “Overall, this left a sense that the two sides had reestablished the trade truce that was signaled in Geneva last month, but with the path forward towards any genuine trade normalization still unclear.”

Vessey chimes: “Trade talks between major economies remain pivotal, shaping inflation and global market dynamics. We’ve heard some positive developments over the past week, but until there’s more clarity, investor sentiment may pivot back to macro drivers.”