China’s Record $1 Trillion Trade Surplus: How Beijing’s Export Machine Is Reshaping the Global Economy in 2025

China has just crossed a symbolic and controversial threshold: according to fresh customs data released on 8 December 2025, the country’s goods trade surplus for the first 11 months of the year has exceeded $1 trillion for the first time on record, reaching roughly $1.07–1.08 trillion. ^[1]

The milestone underlines how powerfully China’s export engine is still driving global trade — even in the middle of an intensifying tariff war with the United States and mounting backlash from Europe.

1. What the latest data show

Customs figures for November 2025 paint the clearest picture yet of how China got to the $1 trillion mark:

Exports rose 5.9% year-on-year in November, rebounding from a 1.1% contraction in October.
Exports totalled about $330.3 billion for the month, beating economists’ expectations.
Imports grew just 1.9%, to around $218.6 billion, highlighting soft domestic demand.
The monthly trade surplus hit about $111.7 billion, the highest in five months. ^[2]

Add those monthly surpluses together, and China’s cumulative goods trade surplus for January–November 2025 climbs to just over $1.07–1.08 trillion, surpassing the roughly $990 billion surplus recorded for the whole of 2024. ^[3]

In other words, China reached the $1 trillion mark before the year even ended, and December’s trade numbers are likely to push the final 2025 surplus even higher.

Several common threads run through the main news coverage today — from AP, Reuters, the Financial Times, Al Jazeera and the Washington Post:

Exports surprised to the upside, especially to non‑US markets.
Imports lagged, reflecting a weak housing market and subdued consumer demand at home.
Trade tensions have not shrunk the surplus; they’ve mostly rerouted it.

2. A shrinking US market — and a pivot everywhere else

One of the most striking details in the November data is how sharply China’s exports to the United States have fallen — and how little that has dented the overall surplus.

Shipments to the US dropped about 28–29% year‑on‑year in November, to roughly $33–34 billion. ^[4]
This slide comes despite an October trade “truce” between Beijing and the administration of US President Donald Trump, which saw Washington partially cut tariffs and China relax some restrictions on exports of rare earths and farm imports. ^[5]

Yet China’s exporters have largely made up for the lost US demand elsewhere:

Exports to the European Union jumped around 14.8% year‑on‑year in November, after barely growing in October. ^[6]
Shipments to Southeast Asia rose by about 8%. ^[7]
Exports to Australia surged roughly 35–36%. ^[8]

Analysts and officials in Washington and Europe suspect that “transshipping” is one reason for this resilience: some goods are assembled or lightly processed in Southeast Asia and then re‑exported to the US or EU, partially sidestepping direct tariffs on Chinese products. ^[9]

At the sector level, China’s strength is clearest in autos and clean tech:

China’s worldwide car exports jumped about 53% in November, after already rising 34% in October, worrying policymakers in Germany and France. ^[10]
A detailed study by the Council on Foreign Relations notes that China’s manufactured‑goods surplus now exceeds $2 trillion, with booming exports of electric vehicles (EVs), batteries and solar panels, and that China’s goods trade surplus overall is now around $1.2 trillion in customs data, or over 2% of world GDP. ^[11]

Taken together, the picture is of an economy that is selling far more to the world than it buys, and doing so increasingly in high‑value sectors where it is rapidly gaining market share.

3. Weak imports highlight China’s domestic demand problem

If exports tell one half of the story, imports tell the other. November’s modest 1.9% rise in imports, after years of near‑flat growth in import volumes, is another sign that domestic demand remains soft. ^[12]

Several factors are dragging on imports:

A prolonged property downturn has hit construction materials and home‑related spending. ^[13]
Households remain cautious, preferring to save rather than spend, despite lower interest rates. ^[14]
Factory surveys show eight straight months of contraction in manufacturing activity, suggesting companies are reluctant to invest or import new equipment. ^[15]

International institutions have been sounding the alarm about this imbalance for months.

The World Bank estimates that China’s current account surplus reached about 3.7% of GDP in Q1 2025, driven by strong exports and weak imports. ^[16]
The IMF’s October 2025 World Economic Outlook puts China’s current account surplus at around 3.2% of GDP in the first half of 2025, larger than in 2024 and above its long‑term average. ^[17]

An ECB analysis goes further, arguing that China’s export growth has been strongest in sectors where domestic demand is weak, meaning excess capacity is being pushed abroad rather than absorbed at home. ^[18]

In short, Net trade — not consumption or investment — is doing much of the heavy lifting for China’s growth in 2025.

4. Beijing’s policy response: talk of rebalancing, reality of export‑led growth

Today’s data dropped alongside important policy signals from Beijing.

According to a Politburo meeting readout reported by Xinhua and summarized by Reuters, Chinese leaders have made “expanding domestic demand” the top economic priority for 2026, promising more proactive fiscal and monetary policies to sustain growth around 5%. ^[19]

The likely ingredients include:

Higher government spending and more local‑government bond issuance.
Further interest‑rate cuts or liquidity injections by the People’s Bank of China.
Targeted support for property completion, consumer subsidies and industrial upgrading. ^[20]

At the same time, both the Financial Times and AP underline that policymakers are doubling down on advanced manufacturing for export — especially EVs, batteries, robotics and other high‑tech goods — as a core pillar of the growth strategy. ^[21]

In other words, Beijing is talking about rebalancing toward domestic demand, but its most successful policy lever remains the external sector. The record trade surplus is a direct consequence of that choice.

5. Global backlash: Europe moves toward tariffs, the US stays confrontational

A $1 trillion Chinese surplus doesn’t just show up in spreadsheets; it reverberates through global politics.

Europe’s mounting anger

Europe, in particular, is increasingly vocal about what it sees as unfair Chinese competition:

French President Emmanuel Macron, fresh from a state visit to China, has warned that Europe will be “forced to take strong measures” — including tariffs — if Beijing does not reduce its surplus with the EU, which exceeded €300 billion in 2024 and has kept rising in 2025. ^[22]
Reuters notes that the EU’s goods trade deficit with China has grown by nearly 60% since 2019, prompting calls in Paris and Berlin for a tougher industrial policy. ^[23]
Brussels has already imposed countervailing duties of roughly 17–35% on Chinese EVs, on top of the EU’s standard 10% car import duty, and is now reviewing the effectiveness of those measures. ^[24]

An ECB‑linked study argues that weak Chinese domestic demand, not just US tariffs, is the main reason Chinese firms are “dumping” goods in Europe at rock‑bottom prices, intensifying pressure on local manufacturers. ^[25]

The US tariff war 2.0

On the other side of the Atlantic, the United States remains locked in a tariff war with Beijing:

The Trump administration’s tariffs have driven China’s exports to the US sharply lower, but have not prevented China’s overall surplus from hitting a record — a point highlighted today by US and global media. ^[26]
A widely read CFR and Capital Economics analysis describes this as the “great tariffs illusion”: tariffs change where goods are shipped, but not the underlying imbalances, because China diverts exports to other markets and cuts import demand at home. ^[27]

In political terms, the new $1 trillion number is likely to strengthen hawkish voices in Washington and Brussels arguing for broader industrial policy, export controls, on‑shoring subsidies and new tariffs.

6. What do forecasts say? Will the surplus keep growing?

Economists and institutions that track China’s external balance had already been warning that trade imbalances were set to widen. Today’s milestone is widely seen as confirmation rather than surprise.

Capital Economics: surplus likely to widen further

In a China‑focused note titled “Six non‑consensus calls for 2026”, Capital Economics argues that the consensus view — that China’s trade surplus will stabilize as a share of GDP — is wrong. They expect the surplus to widen further next year because: ^[28]

Growth will remain weak (around 3% in their own activity proxy),
Overcapacity in manufacturing will persist, and
Ongoing deflationary pressure will keep China’s goods relatively cheap on world markets.

A separate Capital Economics blog, “The great tariffs illusion”, estimates that once statistical distortions are corrected, China’s current account surplus already stands at about $821 billion for the 12 months to June 2025, larger relative to the global economy than on the eve of the 2007–08 financial crisis. ^[29]

CFR and ECB: structural surplus, not a blip

Brad Setser at the Council on Foreign Relations argues that China’s customs data show a goods trade surplus of about $1.2 trillion, equivalent to roughly 6% of China’s GDP and more than 1 percentage point of its trading partners’ GDP — a level too large to be temporary. ^[30]

CFR notes that export volumes are up around 40% since end‑2019, while import volumes are up only about 1%, implying that net exports are contributing more than 1 percentage point to annual growth. ^[31]
The ECB broadly concurs, linking China’s rising surplus to a shortfall in domestic demand and warning that this trend is likely to fuel more trade tension over time. ^[32]

IMF and World Bank: elevated surpluses as far as they can see

The IMF’s October 2025 World Economic Outlook and its updates project that:

China will grow at around 4.8–5% in 2025–26, after an upward revision earlier this year. ^[33]
Its current account surplus will remain above pre‑pandemic norms, hovering around 3% of GDP in the near term. ^[34]

The World Bank similarly highlights that net trade was a major positive contributor to growth in early 2025, with the current account surplus widening, even as capital outflows and weak private investment persisted. ^[35]

Bottom line on the outlook

Pulling these forecasts together, the consensus among independent analysts after today’s data is that:

China’s trade surplus is structural, not cyclical.
It is unlikely to shrink meaningfully in 2026 without a major domestic‑demand push (for example, large‑scale social spending or direct household transfers).
As long as policy remains cautious on that front, exports and weak imports will keep the surplus large — and probably growing.

7. What this means for businesses, investors and policymakers

For multinational companies

Export‑oriented manufacturers that compete with China — especially in autos, electronics, solar and batteries — face intensifying price pressure and a high risk of new trade barriers in their home markets.
Firms that rely on Chinese inputs benefit from cheaper components, but must manage political and supply‑chain risk, including the possibility of fast‑moving tariffs or sanctions.

For commodity producers

China’s soft imports and focus on higher‑value exports matter for commodity exporters:

Demand for iron ore, copper and energy may grow more slowly than during past Chinese booms.
By contrast, exporters of agricultural products (notably soybeans) and critical minerals may see relatively stronger demand, as recent US–China deals have restored some farm imports and rare‑earth flows. ^[36]

For financial markets

A large and persistent current account surplus tends to put upward pressure on China’s currency, but this is being offset by capital outflows and policy efforts to keep the renminbi competitive. ^[37]
The surplus also adds to global disinflationary pressure: by exporting more low‑cost goods and importing less, China pushes down traded‑goods prices worldwide, complicating central banks’ efforts to hit inflation targets. ^[38]

For policymakers

The new $1 trillion number raises tough questions:

Can advanced economies absorb such a large surplus without resorting to aggressive protectionism?
Will the IMF, WTO and G20 adapt their frameworks to address what CFR calls a “mis‑measured and understated” Chinese external surplus? ^[39]
And inside China, how long can authorities rely on export‑driven growth before social pressures from weak jobs and incomes force a more redistributive, demand‑side strategy?

These are the debates that today’s data are already inflaming in capitals from Washington and Brussels to Tokyo and Seoul.

8. Key takeaways

Historic milestone: In the first 11 months of 2025, China’s goods trade surplus surpassed $1 trillion for the first time, reaching roughly $1.07–1.08 trillion, already above the full‑year 2024 record. ^[40]
Exports shift, surplus persists: Exports to the US have slumped nearly 30%, but surging sales to Europe, Southeast Asia and Australia — especially in autos and clean tech — have more than compensated. ^[41]
Imports lag: Weak domestic demand, a property slump and cautious consumers keep imports subdued, meaning net trade is doing much of the work sustaining growth. ^[42]
Backlash is building: Europe is openly threatening tariffs and reviewing existing EV duties, while the US maintains its tariff war, raising the risk of a broader protectionist wave. ^[43]
Most forecasts see the surplus rising further: Capital Economics, the ECB, CFR and others expect China’s external surplus to remain high or widen in 2026, unless Beijing launches a much more forceful push to stimulate domestic demand. ^[44]

For now, China’s record $1 trillion trade surplus is both a sign of the resilience of its export machine and a warning light for global trade relations. How Beijing and its trading partners choose to respond in 2026 will help determine whether this milestone becomes a new normal — or the high‑water mark before a new round of trade conflict.