China’s Trade Surplus Reaches Record, Defying Expectations of Tariff-Driven Slowdown
China reported a $1.19 trillion surplus in 2025, with exports growing 5.5%
- China’s trade surplus reached a record $1.2 trillion in 2025, demonstrating manufacturing strength despite tariffs.
- Exports increased 5.5% in 2025, while imports remained flat, contributing to the substantial trade surplus.
- December saw exports rise 6.6% and imports increase 5.7%, exceeding economists’ forecasts for both.
When President Trump returned to the White House last year, economists predicted new tariffs would stifle China’s massive export machine.
Instead, China’s trade surplus, the difference between its exports and imports, reached a record in 2025 at $1.19 trillion. Exports jumped 5.5% last year from 2024 in dollar-denominated terms, compared with 5.9% growth the prior year, China’s customs agency reported Wednesday.
Shipments to the U.S. fell, but Chinese manufacturers found new customers in the rest of the world. The global economy, powered by AI spending, kept chugging along, keeping external demand strong. And another year of producer-price deflation made Chinese goods attractive to overseas buyers.
The result: strong exports helped power China’s economy to expectation defying growth last year, even as the property market and consumer sentiment in the country remained in the doldrums.
New markets
Exports to the U.S. dropped 20% in 2025. Meanwhile, exports to a bloc of Southeast Asian countries jumped 13%, those to the European Union rose 8.4%, those to Latin America increased 7.4% and those to Africa surged 26%.
Overall exports for the month of December grew 6.6% year over year, up from 5.9% in November, while imports rose 5.7%.
As some U.S. buyers have adjusted sourcing to sidestep higher tariffs on made-in-China goods, supply chains that have shifted from China to places such as Vietnam or Mexico often still rely on Chinese components or equipment, keeping the country’s formidable manufacturing ecosystem busy.
China’s global trade imbalance has increasingly become a geopolitical liability. Some places, such as the European Union, worry that a flood of cheap Chinese goods could hurt local industries.
The International Monetary Fund has warned that China, the world’s second-largest economy, is too big to rely on exports for growth.
Powering growth
At the beginning of the year, some wondered if Trump’s tariffs might push Chinese leaders to restructure the economy to lean more on consumer spending rather than exports, something long called for by many Western economists and some Chinese policy advisers.
But the surprising resilience of Chinese exports took off some of the short-term pressure for Beijing to increase consumption. A program offering subsidies to buy household appliances and electric vehicles helped perk up spending earlier last year, but retail-sales momentum has since waned.
Analysts have described China’s economy as K-shaped or two-track. Exports and manufacturing are driving economic growth, while the real-estate sector and household demand are lagging.
Year ahead
Some economists believe it could be difficult for China to reprise such strong export growth in 2026. The chaotic on-again-off-again U.S. tariffs last year sparked frontloading of orders that accounted for some of China’s export rush.
Still, many analysts don’t expect China’s export prowess to weaken anytime soon. Global demand should remain resilient and Chinese manufacturers have proven their competitiveness despite tariffs. A trade truce between the U.S. and China has created tentative stability in tariff policy.
Beijing recently announced that it would phase out export tax rebates for solar products and batteries, which have experienced significant price declines because of oversupply.