Chinese exports to the U.S. fell nearly 35% in May compared to a year prior as trade tensions escalate between the two countries, The Associated Press reported Monday.

China exported $28.8 billion worth of goods to the U.S. in May, a substantial decrease from $44 billion in May 2024 that mark the steepest year-over-year drop in shipments since February 2020, according to Chinese government data reviewed by the AP. The drop in U.S.-bound exports occurred in the same month in which a temporary trade truce between Beijing and Washington fell apart.

Under the May 12 trade truce, both countries committed to reducing tariffs for 90 days while working towards a more permanent deal, but the agreement quickly unraveled as each side accused the other of breaching its terms.

“I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn’t want to see that happen. Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!!” President Donald Trump posted to Truth Social on May 30. “The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

In response, the Chinese government accused the U.S. of “provoking new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations,” and vowed to take “forceful measures to safeguard its legitimate rights and interests.”

Chinese imports of U.S. goods also declined by over 18% in May, and China’s trade surplus with America shrank by 41.55% year over year, CNBC reported. Despite the sharp drop in shipments to the U.S., China’s overall exports rose 4.8% year-over-year, according to customs data.

Meanwhile, Taiwan’s exports to the U.S. surged 87.4% to a record high in May, seemingly benefiting from the Trump administration’s temporary suspension of a 32% tariff. Total Taiwanese exports also hit an all-time high of $51.7 billion.

The trade conflict has fueled concerns of deflation in China, as the consumer price index declined for the fourth consecutive month in May, and producer prices fell 3.3% year over year. Representatives from both countries are meeting in London on Monday to resume trade talks, following what Trump described as a “very positive” phone conversation with Chinese President Xi Jinping on Thursday.

“The purpose of the meeting today is to make sure that they’re serious, but to literally get handshakes,” Kevin Hassett, the director of the National Economic Council, told CNBC in an interview on Monday.

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