The Trade War That Refuses to Break China’s Momentum
Six months into President Donald Trump’s renewed trade offensive, one thing has become abundantly clear — China’s export machine remains remarkably resilient.
Despite facing US tariffs as high as 55%, China continues to ship roughly $1 billion worth of goods every day to the United States. In fact, the value of shipments rose slightly in September compared with August, underscoring that Beijing’s industrial and technological grip on global supply chains remains difficult to dislodge.
This sustained flow of exports offers a glimpse into President Xi Jinping’s bargaining power as China and the US prepare for high-stakes trade talks. While Washington’s tariffs were designed to curb China’s export dominance, the data tells a different story — one of strategic endurance and economic interdependence.
“China’s strong position in global supply chains gives it near-term leverage with US importers,” said Bloomberg economists Chang Shu and David Qu. “Realigning production will take time, and that gives Beijing room to negotiate.”
Resilient Trade Amid Tariffs: Why China Still Dominates
In theory, tariffs are meant to discourage imports and protect domestic industries. But in practice, the United States remains heavily dependent on Chinese goods — particularly in electronics, rare earth materials, and essential components that are difficult to source elsewhere.
Even after six months of elevated trade tensions, China-US trade relations continue to demonstrate the structural challenges of decoupling.
- Daily Exports: Roughly $1 billion worth of Chinese goods still flow into US ports.
- Quarterly Totals: Over $100 billion of goods reached the US in Q3, helping China maintain steady growth.
- Trade Surplus: The bilateral trade surplus climbed to $67 billion, strengthening China’s fiscal position.
Despite a decline in overall trade volume, certain product categories have seen surprising growth. E-cigarettes, e-bikes, refined copper cathodes, and electrical cables all posted significant increases in export value, reflecting continued US demand for specific Chinese-made items.
“While both sides aim to reduce dependence, it cannot be reduced to zero,” said Zhaopeng Xing, Senior China Strategist at ANZ Bank.
Sectors Defying the Tariffs: Electronics, E-Bikes, and Industrial Materials
While tariffs have hurt some exports, others have defied expectations. China’s diversified manufacturing base and adaptability have allowed it to pivot into high-demand sectors.
1. Electronics Remain Unshakable
In the July–September period, China exported nearly $8 billion worth of smartphones, tablets, laptops, and computer components to the US. Although that’s roughly half of last year’s level, the sheer volume shows how deeply embedded Chinese electronics are in the American market.
2. E-Bikes and Smart Devices on the Rise
Exports of electric bicycles exceeded $500 million in Q3 2025, rising slightly from last year as American consumers embrace eco-friendly transport. Similarly, smart home and wearable tech shipments remain strong, supported by resilient consumer demand despite tariffs.
3. Raw Materials Fuel Industrial Growth
Shipments of refined copper cathodes — essential for manufacturing — jumped to $270 million, while electrical cable exports rose 87% to $405 million. These items illustrate China’s continued dominance in industrial inputs that are vital to US manufacturing and infrastructure development.
The Loopholes: How Trade Flows Around the Tariffs
While official tariffs are steep, savvy exporters and importers are finding ways to mitigate the impact through trade loopholes and trans-shipment practices.
ANZ’s Zhaopeng Xing noted that some American importers reduce costs by declaring goods based on their “first sale” value in third-party countries, such as Vietnam or Mexico, before raising prices upon entering US ports.
This practice — combined with trans-shipping, where goods are rerouted through intermediary countries — allows many companies to pay lower effective tariffs or avoid them entirely.
“There are a lot of loopholes,” Xing said. “US Customs simply doesn’t have the manpower to track every shipment.”
In addition, China’s powerful e-commerce platforms like Shein and Temu have adapted swiftly. Despite the elimination of the “de minimis” exemption (which once allowed small packages to enter the US duty-free), Chinese retailers still managed to send $5.4 billion worth of parcels across the Pacific since May, even under new 54% tariffs.
This demonstrates China’s agility in using digital trade and logistics innovation to sustain export flows despite regulatory hurdles.
Beijing’s Leverage: Economic Strength as a Negotiating Tool
President Xi Jinping enters upcoming trade negotiations with a strategic upper hand. The continued strength of Chinese exports — even amid the most aggressive US trade policies in decades — highlights the interdependence that still binds both economies.
The numbers bolster Xi’s position as talks approach to extend a 90-day tariff truce set to expire in November. His bargaining power rests on three pillars:
- Industrial dominance: China still controls critical components for electronics, rare earths, and clean energy supply chains.
- Trade resilience: Even at reduced volumes, the flow of goods remains too essential for US importers to replace immediately.
- Economic stability: Strong exports support Beijing’s domestic growth targets, allowing China to negotiate from a position of confidence.
Meanwhile, President Trump faces mounting pressure at home — from business lobbies, import-dependent manufacturers, and consumers — all of whom are feeling the sting of higher prices and disrupted supply chains.
“China’s daily billion-dollar export flow gives Xi tangible leverage,” said a Hong Kong-based economist. “He can afford patience, while the US must balance economic optics and inflation concerns.”
The Shifting Trade Landscape: What’s Changing and What’s Not
While some sectors show resilience, others are clearly feeling the strain. The International Monetary Fund (IMF) recently warned that the current trade slowdown between the two giants is more severe than during the 2018–2019 tariff war.
1. Declining Sectors
- Game consoles and televisions have seen steep drops, as companies like Nintendo and Microsoft shift production to Vietnam to avoid tariffs.
- LCD exports from China to the US have plunged 73% year-over-year, reflecting supply chain diversification.
2. Emerging Trends
However, new export frontiers are emerging. Business-to-business (B2B) e-commerce from China surged from $31 million in August to $201 million in September, showing a pivot toward bulk shipment models that circumvent retail-level tariffs.
3. Long-Term Realignment
While Trump’s onshoring strategy is driving some relocation of production to Southeast Asia and North America, economists agree that China’s entrenched manufacturing infrastructure — along with its vast domestic market — will ensure its continued relevance in global trade.
The Rare Earths and Bargaining Chips: Beijing’s Strategic Arsenal
Beyond exports, China’s leverage extends into strategic resources. The country remains the world’s dominant producer of rare earth elements, critical for everything from semiconductors to defense technology.
By maintaining control over rare earth supply chains, China wields a powerful bargaining chip in negotiations. Any disruption could impact US electric vehicle production, military hardware, and renewable energy projects, giving Xi a subtle but potent advantage.
Trump has repeatedly listed rare earths, fentanyl, and soybeans as top priorities for discussion — signaling just how crucial these commodities are to both sides.
The Bigger Picture: Decoupling vs. Dependence
Despite Washington’s determination to reduce reliance on China, complete economic decoupling remains unrealistic in the near term. The sheer scale of Chinese manufacturing — from electronics and chemicals to pharmaceutical ingredients — makes rapid substitution nearly impossible.
Even as supply chains diversify, the gravity of China’s industrial ecosystem keeps drawing global manufacturers back. Neighboring economies like Vietnam, Malaysia, and Mexico are gaining ground, but few can match China’s efficiency, workforce, and infrastructure at comparable costs.
As ANZ’s Xing put it:
“Both sides may reduce dependence, but it cannot be reduced to zero.”
The Fragile Balance of Power in China-US Trade Relations
The persistence of $1 billion in daily exports from China to the US highlights the complex, intertwined reality of modern global trade. While tariffs have reshaped supply chains and strained diplomatic ties, they have not succeeded in breaking China’s economic influence.
As President Xi Jinping and Donald Trump prepare for their next round of negotiations, the dynamics of China-US trade relations are clearer than ever: both nations need each other, but neither is willing to concede ground.
Xi’s advantage lies in China’s industrial indispensability, while Trump’s leverage rests in market access and political pressure. Together, they represent two sides of a fragile equilibrium that will define global trade for years to come.
In the end, the outcome may not hinge solely on tariffs or trade volumes, but on who adapts faster to a shifting global economy — one where AI, rare earths, and digital commerce are the new battlegrounds for economic supremacy.
Until then, China’s billion-dollar-a-day export flow serves as both a symbol of resilience and a reminder: decoupling may be the goal, but interdependence remains the reality.