Filenews 10 December 2025
By Kostas Raptis
China's trade surplus exceeded $1 trillion for the first time, a sign that the trade war with the United States is turning into a strategic defeat for Donald Trump. Faced with high U.S. tariffs, Chinese manufacturing redirected its exports outside the U.S. market, boosting sales to Europe, Australia, and Southeast Asia.
According to the latest customs data, Chinese exports rose in November by 5.9% year-on-year, reversing October's -1.1% contraction and beating Reuters' forecast of a 3.8% rise. Imports increased by 1.9%, compared to a rise of 1% in October (with a forecast of 3%). The monthly trade surplus came in at $111.68 billion, the highest level since June, compared with $90.07 billion in October (and a forecast of $100.2 billion).
Overall, in the eleven months of the year, China's surplus has now exceeded $1 trillion, for the first time in history. Beijing has intensified the diversification of its export markets since Trump won the 2024 election, seeking closer ties with Southeast Asia and the European Union, while leveraging the global manufacturing footprint of Chinese companies to create new hubs with lower tariffs.
Exports to the US fell in November by 29% year-on-year, while exports to the EU increased by 14.8%. Shipments to Australia rose 35.8 percent, while Southeast Asian developing economies imported 8.2 percent more Chinese goods.
The average US tariff on Chinese goods has risen to 47.5%, a level significantly higher than the 40% threshold, above which, according to economists, the profit margins of Chinese exporters are eroding. Reduced access to the US market after Trump's return to the White House is estimated to have limited the growth of Chinese exports by about 2 percentage points, equivalent to about 0.3% of Chinese GDP.
October's unexpected recession, which followed an 8.3% rise in September, is interpreted as a sign that China's "frontloading" export tactics before Trump's tariffs take full effect. Despite an improvement in new export orders in November, they remain in a contraction phase, while official survey shows that the industrial sector contracted for the eighth consecutive month, highlighting the ongoing uncertainty.
At the same time, China's rare earth exports rose 26.5% month-on-month in November, the first full month since Xi-Trump agreed with South Korea to speed up shipments of critical minerals from the world's largest refinery. In the agricultural sector, soybean imports are heading for their best year, with Chinese buyers increasing orders from American producers, in addition to important markets from Latin America.
However, domestic demand in China remains weak, due to the prolonged crisis in the real estate market. The Politburo of the Communist Party has pledged to take measures to stimulate domestic demand, which analysts see as crucial to weaning the $19 trillion economy from its dependence on exports.
According to Asia Times, the new text of the US National Security Strategy released by the Trump administration reflects a tacit acknowledgment by the White House that the chances of prevailing in the trade war are limited. Trump, however, does not acknowledge personal error, but blames his predecessors, arguing that encouraging investment and outsourcing in China did not lead to Beijing's integration into a "rules-based international order", but the opposite.
The strategy text emphasizes:
"In the future, we will restore balance to America's economic relationship with China, prioritizing reciprocity and fairness to restore American economic independence. Trade with China should be balanced and focused on non-sensitive factors. If America remains on a growth trajectory and can maintain it, along with a mutually truly beneficial economic relationship with Beijing, we will have to move from our current $30 trillion economy. in 2025 to $40 trillion in the 2030s, putting our country in an enviable position to maintain its status as the world's leading economy."
China has recycled about $1.3 trillion from its trade surpluses into loans to the Global South, a move estimated to pose new national security challenges for the U.S. and its allies. Europe, Japan, South Korea and other countries collectively own about $7 trillion in net foreign assets, while international financial institutions, including multilateral development banks, hold a total of $1.5 trillion. Nevertheless, their collective capability is "not strategically aligned," leaving an open field for Chinese economic activism.
