The trade war this year between China and the United States started with a bang, a fast-and-furious escalation of tariffs to astronomical levels. In the ensuing months, both countries showed a willingness to pull back and not shut down trade between the world’s largest economies.
But they have made little discernible progress in resolving their differences on trade. On Monday, after a fourth round of talks, U.S. Treasury Secretary Scott Bessent said that the two sides would talk about trade again in about a month.
While other countries have scrambled to meet President Trump’s demands to strike deals for reduced tariffs, China has kept to its own timetable. The trade impasse with the United States has exacted a price — mainly from a sharp drop-off in exports to America. Here is how Beijing is trying to weather the standoff while doing what it can to avoid blinking first.
China’s exports to the U.S. plunge, but surge everywhere else.
China’s exports to the United States are down about 15 percent so far this year. But that has not slowed its export machine.
The country’s trade surplus with the world came within a whisker of $1 trillion last year, as its exports exceeded its imports on a scale seldom seen except around the time of the two world wars. Despite U.S. tariffs, this year’s surplus for China is on track to be even bigger.
This year, through August, China’s trade surplus widened to $785.8 billion from $612.6 billion a year ago. Its surplus with countries across Southeast Asia, Africa, Latin America and Europe has climbed rapidly. China’s electric vehicle brands are storming new markets in Europe and Southeast Asia, while sales of heavily discounted Chinese solar panels are booming in Africa.
Some of the excess that China exports to other countries winds up in the United States, although the Trump administration is vowing to crack down on that trade.
China has managed to avert the steepest tariffs threatened by President Trump — up to 145 percent at one point. But goods from China’s manufacturers are still subject to a minimum tax of 30 percent in addition to other duties, pushing the actual rate on many Chinese imports significantly higher.
For China, its strategy was years in the making. It has invested in building infrastructure across the developing world for over a decade. The money has helped China establish economic ties and exert influence in regions that are now becoming increasingly crucial as it seeks to redirect trade from the United States to the rest of the world.
