China has vaulted to a historic milestone in global commerce, recording a goods trade surplus of more than $1 trillion with the rest of the world in 2025, even after years of escalating tariffs from Washington aimed at curbing its export machine. According to Chinese customs data for the first 11 months of 2025, the surplus has already reached roughly $1.07 trillion, overtaking the full-year record of about $992 billion set in 2024 and putting Beijing on course for a full-year surplus potentially above $1.2 trillion. This outcome underlines how tariffs have reshaped, but not reversed, China’s export dominance.

Image Illustration. Photo by Camillo Corsetti Antonini on Unsplash

A Record Surplus Built on Weak Imports and Rerouted Exports

The sheer scale of the surplus reflects a combination of resilient exports and subdued domestic demand. In November alone, China’s exports rose 5.9 percent year-on-year while imports grew just 1.9 percent, resulting in a monthly surplus of about $112 billion. That pushed the cumulative goods surplus over the $1 trillion mark for the first time in any calendar year, surpassing an already elevated 2024 base. Research firm Capital Economics now projects that the full-year goods surplus will reach around $1.23 trillion, equivalent to just over 1 percent of global GDP — a level comparable, in relative terms, to the surpluses the United States recorded during World War II.

Much of this surplus has been generated not through booming trade with the United States, but by redirecting exports toward Europe, Southeast Asia and the broader “Global South.” Exports to the U.S. in November were down roughly 29 percent from a year earlier, while shipments to Europe, Australia and Southeast Asia jumped by between about 8 and 36 percent. Analysts say Chinese producers have increasingly used third countries such as Vietnam, Indonesia and Mexico as manufacturing or transit hubs, allowing some goods to reach the U.S. market indirectly despite steep duties on direct imports from China. In parallel, China has consolidated trade surpluses with more than 170 countries, according to customs-based estimates, highlighting how its export engine has broadened well beyond the U.S. market.

Trump’s Tariffs Reshape, but Do Not Halt, Trade Flows

The record surplus comes seven years after Donald Trump first launched a tariff offensive against Chinese imports, and in the first year of his second term, during which the White House again raised duties sharply. In April 2025, the administration imposed a 10 percent baseline tariff on all U.S. imports and a 34 percent rate specifically on Chinese goods, before a retaliatory spiral briefly pushed some levies as high as 145 percent on Chinese products and 125 percent on U.S. exports to China. Average U.S. tariffs on Chinese imports, after a subsequent partial rollback, still stand at close to 40–50 percent, well above pre-trade war levels of around 3–4 percent. Beijing has responded with its own tariffs and export controls, including curbs on critical minerals and selective bans on U.S. farm products, but has largely kept its broader export sector humming by tapping other markets and upgrading into higher-value industries.

Economists argue that the persistence of China’s surplus, despite tariffs, illustrates a basic macroeconomic point: trade balances are shaped more by domestic savings and investment patterns than by border taxes alone. China’s high savings rate, an undervalued currency and constrained household consumption have all contributed to excess production that must find an outlet overseas. Far from forcing a rapid pivot to consumption-led growth, the tariff shock has coincided with weak domestic demand and a troubled property sector, reinforcing Beijing’s reliance on exports as a crucial growth driver.

High-Tech Manufacturing Powers the Surplus

Behind the headline figures lies a distinct shift in what China sells to the world. High-tech and capital-intensive industries — from electric vehicles and batteries to semiconductors and shipbuilding — are now central to the trade boom. For the first 11 months of 2025, high-tech exports grew faster than total exports, with technology goods outpacing the overall increase by about 5 percentage points, according to industry data cited by economists. Auto shipments, led by electric vehicles from brands such as BYD and SAIC, have surged to an estimated 6.5 million vehicles in 2025, more than a million units above last year’s level. That expansion has eaten into market share for Japanese and German manufacturers in Europe and emerging markets alike. Semiconductor exports, a crucial component in everything from smartphones to medical devices, are estimated to be up nearly 25 percent year-on-year, while ship exports have climbed by roughly 27 percent over the same period, according to analysis by Chatham House and industry consultancies.

These trends signal how China is climbing the technological ladder rather than simply competing on low-wage manufacturing. A study from the Australian Strategic Policy Institute (ASPI), cited by analysts at Chatham House, finds that China now leads the world in research capacity in 66 of 74 key technologies, from advanced materials to artificial intelligence, with the U.S. leading in just eight areas. That technological edge is increasingly being translated into export market share, heightening competitive pressure on industrial bases in Europe, Japan and South Korea as much as in the United States.

Global Backlash: Europe Edges Toward Its Own Tariff Fight

As China’s surplus swells, political pressure is building across advanced economies. The European Union, already worried about a flood of Chinese electric vehicles and solar equipment, has opened a series of anti-subsidy and anti-dumping probes targeting sectors from EVs to wind turbines. European leaders have warned that domestic manufacturers are being undercut by heavily supported Chinese rivals offering cut-price goods in key green industries. French President Emmanuel Macron and other European officials have floated the possibility of new tariffs or broader industrial policy responses to defend local jobs and supply chains from what they see as unfair competition tied to state-directed overcapacity in China’s factories. That debate echoes the earlier U.S. turn toward tariffs, but with more emphasis on climate-linked sectors and strategic technologies rather than broad-based duties on consumer goods.

An Unsustainable Imbalance?

Despite the short-term boost that a huge trade surplus provides to China’s industrial output, many economists view the current trajectory as unstable. A surplus exceeding 1 percent of global GDP, concentrated in a single economy, risks fueling protectionist backlashes and deeper geopolitical rifts. Analysts at Chatham House and other research institutions argue that the renminbi remains undervalued and that allowing the currency to appreciate would help narrow the surplus, support Chinese household purchasing power and ease external tensions. Yet Beijing has been cautious about moves that could further strain an already fragile domestic economy still digesting a property downturn and elevated youth unemployment.

For Washington, the data is a stark reminder that aggressive tariffs have not delivered a decisive reset of the trade relationship. The U.S. still runs a sizable bilateral goods deficit with China — nearly $300 billion in 2024, according to U.S. Census Bureau figures — even after imports fell from their pre-trade war peak. Rather than shrinking China’s overall surplus, U.S. tariffs have encouraged firms to reroute goods and have shifted much of the adjustment onto third countries that now find themselves on the front line of rising protectionism.

Conclusion: A Test of the Global Trading Order

China’s unprecedented $1 trillion-plus trade surplus crystallizes a new phase in the global economy. It shows that a determined export superpower can, at least for a time, withstand even punitive tariffs from the world’s largest consumer market by pivoting to other buyers, upgrading its technology base and keeping domestic demand on a tight leash.

But the same surplus is also intensifying political demands for countermeasures in the United States, Europe and beyond, and is raising fresh questions about whether the existing trade architecture — from the World Trade Organization to regional pacts — can manage a world where one country runs a wartime-scale surplus in peacetime. How Beijing, Washington and Brussels respond in the coming year will help determine whether this moment marks the peak of China’s export supremacy, or merely another step in an era of deeper fragmentation in global trade.