Boy, with our great tariff war, we’re sure fixing China’s wagon… if by “fixing China’s wagon” you mean helping them move more cargo to more countries and run the biggest trade surplus the world has ever seen:
China’s trade surplus surged to a record of almost $1.2 trillion in 2025, the government said Wednesday, as exports to other countries made up for slowing shipments to the U.S. under President Donald Trump’s onslaught of higher tariffs.
China’s exports rose 5.5% for the whole of last year to $3.77 trillion, customs data showed, as Chinese automakers and other manufacturers expanded into markets across the globe. Imports flatlined at $2.58 trillion. The 2024 trade surplus was over $992 billion.
…While China’s exports to the U.S. have fallen sharply for most of last year since Trump returned to office and escalated his trade war with the world’s second-largest economy, that decline has been largely offset by shipments to other markets in South America, Southeast Asia, Africa and Europe.
For the whole of 2025, China’s exports to the U.S. fell 20%. In contrast, exports to Africa surged 26%. Those to Southeast Asian countries jumped 13%; to the European Union 8%, and to Latin America, 7% [“China’s Trade Surplus Surges 20% to a Record $1.2 Trillion, Even with Trump’s Tariffs,” AP via NPR, 2026.01.14].
China’s $1.2T trade surplus gave them more than enough cushion to help Brazil weather the tariff war and reorient its own economy away from the U.S.:
Trade between Brazil and China hit a record US$171 billion in 2025, more than double Brazil’s total with the United States last year, as Chinese demand for Brazilian oil, farm goods and minerals surged and US tariffs on Brazilian exports nudged Brasilia to deepen ties with Beijing.
…The latest figures, released by the China-Brazil Business Council on Wednesday, showed that trade between the two countries had reached a scale unmatched by any other Brazilian partnership, highlighting how geopolitical shocks were accelerating a long-term reorientation of Brazil’s external commerce.
According to the council’s full 2025 report, total trade volume between Brazil and China rose 8.2 per cent year on year to more than double the US$83 billion Brazil reported with its second-largest partner, the United States.
Brazil recorded a US$29.1 billion trade surplus with China, accounting for 43 per cent of the country’s US$68.3 billion global surplus, extending a 17-year streak of positive balances with Beijing [Igor Patrick, “Brazil–China Trade Hits Record US$171 Billion in 2025 as US Tariffs Prompt Export Pivot,” South China Morning Post, 2026.01.15].
Tariffs haven’t stopped China from competing with the U.S., no longer just on cost but on quality:
Another reason all of this matters is that China is the U.S.’ biggest competitor in global markets.
And in that race, China appears to be winning, by selling more to Africa, South America, Asia, the Middle East. Its biggest companies now dominate in the technologies electrifying the planet, said BMO’s Jennifer Lee.
“They’re still way ahead of everybody else in terms of production of anything clean energy-related,” she said.
Plus, China isn’t competing so much on its low cost of production anymore, said Columbia Business School climate economist Gernot Wagner.
“China is no longer the cheapest for labor. China is the place for advanced manufacturing. Robotics is certainly something China dominates these days,” he said.
That used to be the U.S., Wagner said [Mitchell Hartman, “U.S. Tariffs Aside, China’s Export Business Is Booming,” Marketplace, 2026.01.14].
…while the U.S. shoots itself in the foot with its counterproductive tariffs:
But now, with tariffs boosting the cost of Chinese imports, consumers are facing more price inflation, said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.
“The things they will notice, are all the stuff in Target or Walmart: furniture, clothing, electronics, a lot of that stuff comes from China. Prices are now somewhat higher than they would otherwise be,” he said.
Also, Hufbauer said U.S. factories are hurting because of the decline in trade with China.
“A lot of imports from China are intermediate goods which go into producing manufactured goods. The firms can’t get them, and they’re more expensive,” he said.
And as a result? Manufacturing employment was down in the U.S. in 2025, Hufbauer said.
U.S. agriculture is suffering, too — from the decline in exports due to China’s trade retaliation.
“It’s very painful for farmers. Especially soybeans — China doesn’t just buy from the U.S., they buy from Brazil or other countries,” Hufbauer said [Hartman, 2026.01.14].
Trump says the Supreme Court will make a “complete mess” if it strikes down his tariffs. But the mess is already here, and Trump has made it, motivating China to expand its economic reach, demonstrate its reliability as a trade partner, and leave the U.S. at a long-term disadvantage.