China seems largely unaffected by the tariff policies of the Trump administration, boasting a record trade surplus exceeding $1 trillion annually as of November.
Recent customs data released yesterday indicates that China’s exports climbed 5.9% year-on-year, reaching $330.3 billion, rebounding from a 1.1% drop in October. In the first eleven months this year, the total trade surplus has surged by 22.1%, hitting around $1.08 trillion and surpassing last year’s overall surplus of $992 billion.
This growing trade surplus is occurring despite a significant drop in exports to the U.S., where shipments have plummeted by nearly 29% compared to 2024. This marks the eighth consecutive month of decline in exports to the United States.
Interestingly, these figures emerge after a trade truce was established between President Trump and China’s leader Xi Jinping during talks in late October in South Korea. Part of the agreement includes the U.S. reducing some tariffs while China lifts export restrictions on rare earth minerals and begins importing U.S. soybeans again.
However, economists believe the effects of these tariff reductions probably aren’t evident in November’s export numbers just yet. As Lin Song, the chief economist for Greater China at ING, pointed out, the full impact will likely become clearer in the months ahead.
In November, China’s imports also saw a slight uptick, with a 1.9% increase compared to the same month the previous year, which is a modest rise from the 1% gain reported in October.
The surge in China’s surplus seems mainly driven by increased sales to regions like Southeast Asia, Europe, Africa, and Latin America. For instance, exports to the European Union grew by 14.8% year-on-year, and shipments to Australia rose by a whopping 35.8% within the same timeframe.
However, this widening surplus is raising alarms in other nations. French President Emmanuel Macron, who recently concluded a state visit to China, warned that Europe might implement its own tariffs if China doesn’t tackle this imbalance. He emphasized that the trade surplus isn’t sustainable, noting that by importing less from Europe, China is hurting its own customers.
Macron expressed that if China does not take action, Europe may have no choice but to adopt strong measures similar to those of the United States, including imposing tariffs on Chinese goods in the near future.
In regards to the potential imposition of tariffs from the EU, Song noted it could pose “significant risks to China’s external demand outlook.”
On another front, the U.S. goods and services deficit has risen by $142.5 billion, or 25%, year-on-year, according to federal data. Despite the global tariff increases initiated by the Trump administration, the U.S. has experienced a rise in exports by $108.4 billion (5.1%) and an increase in imports by $250.9 billion (9.2%).
