In the first 11 months of 2025, China ran a customs trade surplus of over $1tn. According to Brad Setser of the Council on Foreign Relations, in 2025 as a whole, its “overall goods surplus . . . should — if accurately measured — approach an astonishing $1.2tn dollars (6 per cent of China’s GDP, well over a percentage point of the GDP of all of China’s trading partners).”
Over much the same period, Donald Trump, obsessed with US trade deficits — both overall and, even more, in manufactured goods — raised average tariff rates to an estimated 14.4 per cent, the highest level since shortly after the second world war.
Why is China running such huge trade surpluses and why is the US abandoning the relatively liberal trade policies of the past eight decades? The answer is the revival of mercantilism.