Business
Have US Tariffs Missed Their Mark? China’s Trade Surplus Reaches a Record $1.2 Trillion
In 2025, China’s trade surplus hit a record $1.2 trillion, boosted by strong exports to Africa, ASEAN, Latin America, and the EU, despite reduced sales to the US.
Key Points
- In 2025, China’s trade surplus hit a record $1.2 trillion, despite U.S. tariffs. Exports to the U.S. declined, but trade with Africa, ASEAN, Latin America, and the EU surged.
- December saw a surplus of $114 billion, fueled by 6.6% export growth. Contrary to trade war narratives, China’s economy adapted effectively, showcasing strong international trade connections.
- Although direct exports to the U.S. dropped 20%, exports to Africa rose by 26%, ASEAN by 13%, and Latin America by 7%. Trade with the EU also increased by 8%, indicating resilience in China’s export market.
In 2025, China achieved a historic trade surplus of US$1.2 trillion, a figure that defies expectations set against the backdrop of US tariffs aimed at diminishing its economic influence. Despite a notable decline in exports to the United States, which fell by 20%, China successfully oriented its trade toward Africa, ASEAN nations, Latin America, and the European Union, resulting in robust export growth. In December alone, China’s surplus reached US$114 billion, augmented by significant export growth of 6.6% and import growth of 5.7%.
- Impact of US tariffs: Despite tariffs averaging 47% on Chinese goods (down from 145% earlier in 2025), China’s exports to the US fell 20% and imports from the US dropped 14.6%. However, this loss was offset by gains in other regions.
- Diversification of trade partners: China expanded exports to Africa (+26%), ASEAN (+13%), Latin America (+7%), and the EU (+8%), showing resilience and adaptability in redirecting trade flows.
The trade surplus, defined as the excess of exports over imports, signals a thriving export sector that counters the narrative of economic suffocation purported by US trade hawks. This success comes despite the intent of tariffs implemented under the Trump administration, which saw the average rate for imported Chinese goods initially surge to 47%. Although efforts to decouple the two largest economies aimed to curtail American reliance on Chinese manufacturing, these measures appear to have fallen short.
- Supply chain “great reallocation”: Many Chinese components are shipped to countries like Vietnam and Mexico, assembled there, and then exported to the US tariff-free under trade agreements. This allows Chinese goods to reach the US indirectly.
- Shift to high-value exports: The boom was driven by cars, mechanical and electrical products, and especially the “new three” industries: electric vehicles, lithium batteries, and solar panels. China is moving beyond low-cost manufacturing to hi-tech competition.
China’s adaptability in the face of economic pressures shines through its strengthened ties with other global markets. Exports to Africa increased dramatically by 26%, and trade with ASEAN nations rose by 13%. Latin America also saw a commendable 7% growth in Chinese imports, while exports to the EU revitalized with an 8% gain, even as tensions over unfair competition surged.
This pivotal shift suggests that while the US may have attempted to restrict China’s market access, Beijing’s export strategies have evolved, allowing it to navigate the unanticipated economic landscape effectively. The elevated trade surplus serves as a testament to China’s resilience, underscoring its ability to pivot trading patterns in response to external pressures, ultimately suggesting that the US’s attempts to contain China’s economic potential have been less effective than anticipated.
A key mechanism behind China’s continued export strength is a “great reallocation” within global supply chains. Chinese firms are increasingly exporting intermediate components to third-party countries such as Vietnam and Mexico. These nations then assemble the final products and re-export them to the US, often benefiting from lower or zero tariffs under their respective bilateral trade agreements, thereby allowing the US to indirectly import Chinese goods while circumventing tariffs.
Furthermore, the nature of China’s exports has shifted, with the 2025 boom driven by high-value industries, specifically the “new three”: electric vehicles, lithium batteries, and solar panels. This indicates China’s evolution from a global manufacturing hub for low-cost goods to a hi-tech supplier and competitor to advanced economies. However, this heavy reliance on exports also highlights domestic economic weaknesses, such as a subdued housing market and declining internal investment, which compel Chinese firms to seek external demand. While global economic momentum is expected to support Chinese exporters into 2026, a persistent trade surplus with over 170 countries poses a structural imbalance that may become politically unsustainable in the long term, risking more drastic protectionist responses if an equilibrium is not found.
Read the original article : Have US tariffs failed to bite? China’s trade surplus hits a record US$1.2 trillion