The News
China’s global trade surplus reached an all-time high of almost $1 trillion in 2024 according to customs data released Monday, as producers rushed out exports ahead of US President-elect Donald Trump’s inauguration next week.
Trump has vowed to impose tariffs of as high as 60% on China, as well as lesser ones with the US’ biggest trade partners, threats that could upend global trade and economic growth.
SIGNALS
China could expand trade with Global South to offset impact of US tariffs
A harsher US tariffs regime could push China to seek stronger ties with developing nations: A new study by the Boston Consulting Group suggests that Beijing’s trade with the Global South — home to 62% of the world’s population — could surpass $1.2 trillion by 2033 as the routes travelled by goods change “at a remarkable pace,” BCGs managing director wrote. But China likely won’t escape US tariffs unscathed, with its total trade growth projected to be limited to 2.7% annually over the next decade. Beijing could resort to temporarily boosting domestic consumption if global trade conflict forces a contraction in its surplus, a China expert argued for the Carnegie Endowment for International Peace in November.
Third countries could be burned in US-China trade war
As trade between the US and China has declined, countries like Mexico, Vietnam, and Taiwan have seen their share of exports to the US increase, but those beneficiaries “might get caught in the crossfire” this time around, ING noted: The incoming Trump administration could target foreign countries operating in third countries, and even goods passing through Chinese ports. China may look to Morocco, for example, as it tries to offshore its EV industry and circumvent Western trade restrictions, but this risks putting the country “at the heart of great-power competition” to become a new battleground in a forthcoming trade war, a Middle East and Africa expert argued for Chatham House.