Australia’s Trade Surplus Shrinks as Imports Surge, China Demand Falters

Australia’s trade balance narrowed in December as a surge in imports outpaced sluggish exports, reflecting weak demand from China. The trade surplus fell to A$5.09 billion, down from A$6.56 billion in November, missing expectations of A$6.79 billion, according to data from the Australian Bureau of Statistics.

Exports edged up just 1.1%, a steep decline from November’s 4.8% rise. The slowdown was driven by reduced shipments of metals, machinery, and port products, as demand from China—Australia’s top trading partner—remained weak amid U.S. tariff tensions, fragile domestic sentiment, and a struggling property sector. Beijing’s aggressive stimulus measures, implemented since September, have shown diminishing returns, failing to boost demand significantly.

Meanwhile, imports surged 5.9% month-over-month, accelerating from a 1.7% rise in November. The jump was fueled by higher demand for overseas consumer goods, including textiles, clothing, and footwear, alongside a rise in capital goods imports. Stronger local demand contributed to the widening gap between imports and exports, weighing on Australia’s trade surplus.

With China’s economic struggles persisting, Australia’s export sector faces ongoing headwinds, while increased domestic consumption continues to drive import growth. The latest trade data underscores the challenges ahead for Australia’s economy as global trade conditions remain uncertain.