Commentary: Why China’s Export Remains Strong Despite the Trade War

In 2024 and 2025, despite the largest and most punitive trade war since the 1930s, China’s exports have shown notable resilience, largely defying market pessimism and outperforming expectations. Short-term front-loading—advancing exports before new tariffs—has been heavily discussed by analysts, but more significant are China’s evolving export patterns and strategies, which point to a long-term shift in the manufacturing landscape. Chinese companies are accelerating overseas expansion (“Going Global 2.0”), upgrading their products, and capitalizing on technological revolutions. The data after the trade wars of 2018 and 2025 shows a move from relocating production to Southeast Asia and North America to targeting a broader set of regions, including Africa, Latin America, and the Middle East. Exports of capital goods to these new destinations have notably increased in 2025, signaling the success of this diversification effort. Meanwhile, Chinese products continue to be high-quality and competitively priced, further boosting global market share and supporting strong export performance this year. Market sentiment hit a low following the U.S. president’s (Donald Trump) announcement of reciprocal tariffs in early 2025, but actual export results have repeatedly exceeded such bearish expectations. The anticipated drop in exports post-front-loading has not happened, suggesting deeper drivers behind China’s export resilience[para. 1][para. 2][para. 3][para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10].

Compared to other global economies, the post-tariff environment has weakened U.S., EU, and Japanese imports. U.S. year-over-year import growth plummeted from 26.4% in March to -1.4% by June 2025, its worst since 2016, and Japan and the EU also showed weak numbers. In contrast, emerging markets such as Brazil, Vietnam, and Saudi Arabia reported import growth rates of 8.3%, 18.5%, and 11.1%, respectively. ASEAN exports were also robust, with Vietnam and Thailand seeing over 15% year-over-year growth in early 2025. Amid a 30% U.S. tariff on Chinese goods, China still posted 6.1% year-over-year export growth from January to July 2025, outperforming its own 2024 record[para. 11][para. 12][para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19].

By destination, China’s exports to Africa, Southeast Asia, the EU, and Latin America grew by 24.4%, 13.6%, 7.3%, and 7.4% respectively year-over-year, far stronger than exports to the U.S., which fell by 11.6%[para. 20][para. 21][para. 22]. Capital goods (e.g., machinery, electronics, electrical equipment) led growth, accounting for roughly 68% of export expansion. This strong performance, particularly in capital goods and electronics, has been attributed to three main factors: (1) rapid expansion of Chinese companies into developing regions with high demand for capital goods, (2) enduring competitiveness of Chinese products, which have continued to squeeze traditional players’ market share with high quality and low cost, and (3) surging global demand for electronics, especially driven by AI, where exemptions from some U.S. tariffs and strong integrated circuit exports boosted numbers[para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30].

These trends offer two strategic insights: first, Chinese companies’ medium- to long-term development will be defined by overseas expansion, adaptable production, and continued product innovation; second, core drivers such as diversified markets and a stronger presence in mid- to high-end global manufacturing are helping Chinese assets recover from deflation. While growth may soften in the year’s second half (forecast at -0.8% to 1.1% for H2, and 2.4% to 3.4% for the year), the resilience of Chinese exports is expected to persist, with ongoing global supply chain repositioning and competitive strength[para. 31][para. 32][para. 33][para. 34].