China’s domestic demand is weak, and with tariffs restricting access to the US market a key question is whether China is ‘exporting disinflation’ abroad. Tariffs reduce demand for Chinese goods in the US and can leave exporters with excess capacity, raising the incentive to divert volumes to other markets and compete more aggressively on price and margins. Consistent with that, China’s exports to third countries have increased since US tariffs were imposed, and the USD price of Chinese exports has