China defies Trump tariffs as trade surplus hits record $1.2T in 2025

China has reported an economic milestone on Wednesday as Beijing’s trade surplus in 2025 reached a record $1.2 trillion, defying the tariffs imposed by the Trump administration.

It is for the first time the nation has surpassed the trillion-dollar ceiling. This figure is roughly equivalent to the entire GDP of a top-20 global economy like Saudi Arabia, as reported by Reuters.

Outbound shipments grew 6.6 percent year-on-year, significantly surpassing economist forecasts of 3.0 percent.

Moreover, the imports surged 5.7 percent in December, compared to a slight 1.9 percent increase in November. Total trade volume for the year reached a record high of 45.47 trillion yuan.

Diversification beyond US markets

The historic surge in trade surplus could be due to the strategic pivot adopted by China in the midst of Trump tariffs and geopolitical frictions.

For instance, exports to the US declined by 20 percent in 2025. However, ASEAN emerged as China’s largest trading partner as exports rose 13.4 percent.

Similarly, China’s exports to Africa jumped 25.8 percent. The shipments to the EU grew 8.4 percent.

"With more diversified trading partners, (China's) ability to withstand risks has been significantly enhanced," Wang Jun, a vice minister ‍at China's customs administration, said at a press briefing.

Key exports behind resilience

China’s rare earth exports in 2025 witnessed a massive surge since 2014 as Beijing imposed restrictions on the shipments, showcasing its strategic edge over the US.

In addition, China purchased a record amount of soybeans in 2025 from South America, bypassing the US amid trade tensions.

Exports of high-tech products increased by 13 percent, meanwhile “new trio” including electric vehicles, lithium-ion batteries, and solar products experienced a 27 percent increase. Moreover the exports of wind power generators rose by 49 percent.

"Strong export growth helps to mitigate the weak domestic demand," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

Despite the record-breaking trade surplus, China is still grappling with internal industrial challenges, hindering its growth momentum.

As China enters 2026, the government is hoping to maintain its export-oriented growth through Q1. But, the “Trump factor” looms large.

On Tuesday, Trump announced plans to impose 25 percent new tariffs on countries trading with Iran as Beijing is Tehran’s biggest trading partner.

According to Zichun Huang, China economist at Capital Economics, “Trump's threat to impose a 25% tariff on countries doing business with Iran underscores the potential for ​renewed trade tensions between the U.S. and China.”