China's export growth slowed to a three-month low in May as U.S. tariffs slammed shipments, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts.

China’s exports, a key driver of the country’s massive trade surplus, still expanded in May, albeit at a slower than expected pace, while growth in exports also weakened sharply. Exports grew 4.8% year-on-year missing expectations for a 5% rise and falling from the 8.1% rise seen in the prior month.

Chinese exports rose less than expected last month as the worst drop in shipments to the US in more than five years counteracted strong demand from other markets.