Understanding China’s 2024–25 Frontloading from the Lens of Product-Level Export Baskets

Jason Lu and Dimitre Milkov

No 2026/013, IMF Working Papers from International Monetary Fund

Abstract: A striking feature of US-China trade tensions in mid-2025 is China’s acceleration of exports to the US ahead of new tariff increases, a phenomenon we term export frontloading. To understand how this was achieved, we develop a factor model analytical framework to characterize China’s product-level exports, across time and destinations, according to a set of latent export baskets. Applying this to data from China’s General Administration of Customs, we document the channels behind the 2024-25 episode and compare them with the 2018 US-China trade tensions. Our analysis points to broad-based adjustments across multiple dimensions in a manner not observed in 2018: (i) shipments to the US accelerated in the second half of 2024, possibly supported by the retention of intermediate inputs that facilitated a ramp-up in domestic production; (ii) from January 2025, domestic production slowed and shipments of intermediate inputs to Vietnam and other ASEAN economies accelerated, consistent with the relocation of export-oriented manufacturing following US tariffs; (iii) exporters prioritized shipments to the US through March 2025, reallocating flows away from third destinations with similar export profiles; and (iv) as shipments to the US fell sharply in April-May amid the escalation of reciprocal tariffs, the decline was offset by increased shipments to third destinations consistent with fulfilling previously deferred orders.

Keywords: Export Frontloading; Trade Tariffs; Production Relocation; IMF working papers; export basket; China's acceleration; trade tension; Exports; Tariffs; Trade tensions; Factor models; Imports; Global; Asia and Pacific (search for similar items in EconPapers)
Pages: 35
Date: 2026-01-23
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