China posts record $1.2 trillion trade surplus despite Trump tariffs

China has reported a record annual trade surplus of $1.2 trillion for 2025, the world’s second-largest economy achieving this milestone despite looming trade war threats from US President Donald Trump. According to official data released by the customs administration on Wednesday, dollar-denominated goods exports surged 6.6% in December compared to the same period the previous year. This growth rate more than doubled the 3.1% median estimate from a Bloomberg analyst poll and surpassed the 5.9% increase recorded in November.

Imports rose 5.7% in dollar terms last month, significantly outperforming analyst expectations of 0.9% and the previous month’s 1.9% growth.

The annual trade surplus exceeded the $1 trillion mark for the first time, surpassing the $993 billion recorded last year. This surge was driven by Chinese manufacturers redirecting shipments from the US market toward alternative destinations. While exports to the US plummeted 20% last year, shipments to the EU rose 8.4% and exports to Southeast Asia climbed 13.4%.

This massive surplus is expected to heighten anxieties among China’s trading partners—particularly the EU, which has complained that its markets are being flooded with low-cost Chinese goods. Brussels has demanded that Beijing stimulate domestic demand and reduce its own barriers to manufactured imports.

China’s total exports for 2025 increased 5.5% year-on-year, while imports remained flat.

Wang Jun, Vice Minister of the General Administration of Customs, stated on Wednesday that export controls on high-tech products by trading partners have hindered China from importing more—a veiled reference to the US. Successive US administrations have imposed strict restrictions on China’s access to advanced semiconductors.

“Some countries are politicizing economic and trade issues, restricting high-tech exports to China under various pretexts; otherwise, we would have imported more,” Wang said, adding that there is “broad scope” for import growth.

Trump had earlier this year threatened tariffs of up to 145% on Chinese goods. Beijing retaliated with its own tariffs and restricted exports of rare earth elements, which are critical to global manufacturing. these maneuvers eventually led to a one-year ceasefire in the trade war, agreed upon during an October summit in South Korea.

According to Reuters calculations, China’s rare earth exports last year reached their highest level since at least 2014. In 2025, China exported 62,585 tons of the 17 elements, representing a 12.9% annual increase.

European trading partners remain skeptical of Beijing’s commitment to reducing trade surpluses, which French President Emmanuel Macron characterized as “unbearable” last year.

Economists also warn that the Chinese economy remains excessively dependent on manufacturing and exports for growth amid weak domestic consumption and a protracted real estate slump.

Eswar Prasad, a professor of economics at Cornell University, noted: “China’s staggering trade surplus is both a symbol of its export prowess and a symptom of the weaknesses in its growth model.”

Speaking to the Financial Times, Prasad added: “The economy’s reliance on exports rather than domestic demand for growth is a bad sign for both China and the global economy.”