China Floods Global Markets with Cheap Exports Despite Trump’s Tariffs
By Staff, Agencies
China’s export machine has surged to record levels despite five months of steep US tariffs, propelling the country toward a historic US$1.2 trillion trade surplus.
Far from being derailed, Chinese manufacturers have aggressively sought new buyers, with exports to India hitting an all-time high in August, sales to Africa on track for a record year and shipments to Southeast Asia surpassing pandemic-era peaks.
The global surge is sparking unease as governments weigh protecting domestic industries against the risks of confronting Beijing, which remains the top trading partner for over half the world. So far, only Mexico has openly retaliated, floating tariffs of up to 50 percent on Chinese cars, steel, and auto parts.
Elsewhere, officials are moving cautiously: India has received dozens of dumping complaints, Indonesia pledged tighter monitoring after outrage over ultra-cheap Chinese clothing offers, and South Africa urged investment over tariffs even as Chinese car exports nearly doubled this year.
Latin America has also felt the pressure. Chile and Ecuador quietly imposed fees on low-cost imports, while Chinese e-commerce giant Temu’s user base in the region soared 143 percent since January. Brazil threatened retaliation but granted Chinese electric carmaker BYD a tariff-free window to expand local production.
Beijing is pairing economic leverage with diplomacy. President Xi Jinping rallied Brics leaders this month to resist protectionism, while Commerce Ministry officials warned Mexico to “think twice” about tariff threats. At the same time, US President Donald Trump is pressing NATO allies to impose tariffs of up to 100 percent on China over its support for Russia, raising the stakes further.
Yet surging exports have not solved Beijing’s internal challenges. Industrial profits fell 1.7 percent in the first seven months of 2025, as firms slashed prices to offload excess supply, deepening the country’s deflationary spiral.
The export boom also undermines Xi’s push to shift growth toward domestic consumption, despite appeals from US Treasury Secretary Scott Bessent for China to prioritize household spending in its new five-year plan.
China’s resilience comes from a mix of tactics: rerouting goods through third countries, capitalizing on new demand in Europe, Australia and India, and benefiting from a weaker renminbi that has boosted competitiveness. Exports of high-value goods, including semiconductors and iPhones produced in India with Chinese parts, are driving much of the surge.
Even with punitive tariffs, Chinese electric vehicle exports remain robust. Carmakers such as BYD, Nio and Xpeng shipped more than US$19 billion worth of EVs in the first seven months of 2025, with Europe still the largest market despite EU levies. Analysts say China’s ability to redirect sales to BRICS and emerging markets means its exporters will continue gaining ground.
“Protectionism from the US and other countries has turned into a paper tiger because Chinese exporters are extremely competitive,” said Arthur Kroeber of Gavekal Dragonomics. “They can absorb tariff costs and find plenty of workarounds”.
For Xi, proving that China can thrive without the US consumer strengthens his position ahead of a high-stakes summit with Trump in South Korea. With a temporary 90-day tariff truce still in place, both sides are racing to shape the next phase of the global trade order—one where China is making clear it will not back down.
