China’s Export Run Continues

By Vaibhav Tandon

It is said that when one door closes, another one opens. China is very much hoping that this proverb continues to hold true.

One call where many forecasters (ourselves included) went wrong last year was our expectation that China's exports would suffer under the new U.S. tariff regime. That view placed too much weight on the presumed bite of tariffs and too little on the ability of Chinese producers to adapt, redirect and reprice output to alternate destinations.

China's exports have proven to be remarkably resilient, one of the few upsides for an otherwise ailing Chinese economy last year. Rather than compress China's export footprint, heightened trade barriers have redirected it, both geographically and along the value chain.

China closed the year with a record goods trade surplus of $1.2 trillion, crossing the trillion-dollar mark for the first time. Tariffs did bite in one place: shipments to the United States fell roughly 20% in 2025, but the lost ground was more than made up elsewhere. With the scale and composition of exports to the United States and Europe broadly similar, the European Union (EU) emerged an obvious alternative. For the first time, China's trade surplus with the EU in 2025 exceeded its surplus with the United States. Exports to the Association of Southeast Asian Nations rose about 13%, to Africa 26% and by around 8% each to the EU and Latin America last year.