Mohamed El Erian Warns Of 'Worrisome' Chinese Trade Data Looming Over US Negotiations, But Bob Elliott Sees 'Little Urgency' For China To Sign A 'Disadvantageous Deal'

As China’s May export data missed expectations just ahead of the second round of U.S.-China trade negotiations, leading experts are offering sharply divergent interpretations of how the data will be leveraged during the trade talks.

What Happened: While Mohamed A. El-Erian, a senior economist and former CEO of PIMCO, has sounded an alarm over “worrisome” figures, Bob Elliott, the CIO at Unlimited Funds, suggests China faces “little urgency” to concede.

According to El Erian, recent Chinese trade and inflation data were particularly troubling as May’s export figures fell below consensus forecasts.

The exports in May grew by 4.8%, missing the expected 5%, “it highlights the growing pressures the Chinese economy is under,” said El Erian.

Despite a rise in trade surplus by 25% compared to the previous year, El Erian noted that inflation in China experienced its “fourth consecutive month of negative readings,” falling by 0.1%, and producer price index inflation registered a negative 3.3%.

In stark contrast, Elliott presented a more sanguine view, asserting that despite U.S. tariffs on Chinese goods “running at 30%,” recent data shows “little indication of a slowdown in the Chinese economy.” He believes these “stable economic conditions suggest little urgency for the Chinese to make a disadvantageous deal” in the ongoing trade talks.

He attributed this resilience to China’s strategic redirection of its export capacity “away from the US and to other jurisdictions.” While exports to the U.S. have indeed fallen by 34.5%, Elliott highlighted that “exports to other locations are up 11.4%.”

He concluded his analysis by stating, “The export data, timely surveys and markets mostly point to the same picture: China is hanging in there just fine despite the high tariffs.”

Why It Matters: As U.S. and Chinese negotiators begin talks, these sharply differing interpretations of China’s economic resilience or fragility will undoubtedly color the approach of both sides, particularly regarding Beijing’s willingness to make concessions.

According to the BBC, U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer will represent Washington in talks, facing a Beijing delegation led by Chinese Vice Premier He Lifeng.

Last week’s phone call between President Donald Trump and Chinese President Xi Jinping, described by Trump as having reached “a very positive conclusion for both countries,” paved the way for this meeting.

Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were flat in premarket on Monday. The SPY was up 0.12% at $599.88, while the QQQ advanced 0.055% to $530.21, according to Benzinga Pro data.