China’s exports grew much more than expected in April, indicating that a bitter trade war with the U.S. was having only a limited impact on export volumes, although the country’s trade balance shrank more than expected. 

China’s imports also shrank less than expected, signaling that local demand was so far facing limited headwinds from Beijing’s 125% tariffs on U.S. goods. 

Exports grew 8.1% year-on-year in April, government data showed on Friday. The reading was much higher than expectations of 1.9%, but slowed from the 12.4% jump seen in the prior month. 

This brought China’s trade balance down to $96.18 bln from $102.64 billion the prior month. The figure was also lower than expectations of $97 billion. 

Friday’s strong export reading indicated that a bitter trade war with the U.S. so far had a limited impact on Beijing’s export volumes. The reading also came as Beijing rolled out more measures to support exports, most notably a sharp devaluation of the yuan through April. 

But a contraction in China’s trade balance signaled that monetary returns from its exports were slowing, with exporters either shouldering some of the burden of the U.S. tariffs, or sending their goods elsewhere at discounted rates. 

China’s imports also slowed substantially less than expected, pointing to some resilience in local demand for overseas goods, despite steep Chinese trade tariffs on U.S. goods. China imposed a 125% tariff on U.S. imports, in retaliation for a 145% tariff levied by President Donald Trump in April. 

While Friday’s data does reflect some resilience in Chinese trade, exports also likely remained underpinned by the U.S. exempting several key items from Trump’s tariffs, such as electronics. China has also exempted several goods from its retaliatory tariffs.

Friday’s trade data comes with trade talks between U.S. and Chinese officials set to begin over the weekend. Trump on Thursday said he was open to slashing his tariffs on China if the talks went well, with a report suggesting he could bring the duty down to 50%. 

Chinese Vice Minister of Foreign Affairs Chunying Hua said on Friday that the U.S. tariffs were unsustainable and the country was prepared for any outcome from the trade talks.