China's trade surplus hits record, exposing vulnerability to Trump's tariffs

The context: The figures highlight China’s reliance on global markets to compensate for weak domestic demand, leaving its economy vulnerable to external risks, including the looming threat of tariffs under the incoming Trump administration.

Global demand for Chinese goods, including electronic components shipped to Southeast Asia, helped offset domestic economic weakness. The surge in exports was also partly driven by the front-loading of orders, as businesses rushed to ship goods ahead of anticipated tariffs from the incoming Trump administration, economists said.

But upcoming US tariffs and European Union levies on Chinese electric vehicles will likely curtail trade gains in the second half of 2025.

What they said: “With rising external uncertainty over trade policies of the incoming Trump administration, China’s export growth is likely to face severe challenges this year,” said Kelvin Lam, senior China economist at Pantheon Macroeconomics.

“All eyes are on January 20 — Trump’s first day in office — to see whether he will follow through on his rhetoric and impose tariffs on Canada, Mexico, and China from day one.”

"Trade front-loading became more visible in December as a result of both Chinese New Year effects and Donald Trump's inauguration," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

"Import growth could be underpinned by stockpiling of commodities like copper and iron ore, as part of [China's] 'buy low' strategy,” he added.

Zichun Huang, China economist at Capital Economics said “outbound shipments are likely to stay resilient in the near-term, supported by further gains in global market share thanks to a weak real effective exchange rate."

"Efforts to front-run tariffs are also likely to boost exports in the coming months. But outbound shipments will weaken later this year if Trump follows through on his threat to impose 60% tariffs on all Chinese goods," he added.