Since returning to office in January, Trump’s new barrage of tariffs on Chinese imports is beginning to reflect in trade data. Chinese exports to the US have fallen sharply in the first seven months of 2025, while China’s exports to Southeast Asian countries—particularly Vietnam—have risen. In this article, we examine the latest trade data to assess the impact of the tariffs on US imports from China and explore potential trajectory of US-China trade amid ongoing trade negotiations.
UPDATE (September 9, 2025): Trump’s tariffs have taken a major toll on US-China trade in 2025, the August trade data from China Customs reveals. In the first eight months of the year, two-way trade dropped 14.4 percent from the same period in 2024 in US dollar terms, with exports falling at an even faster 15.5 percent rate. The US has also fallen to third place among China’s top trade partners, behind ASEAN and the EU. However, it remained China’s trade partner on a single-country basis.
The US’s shrinking share of China’s overall foreign trade – which increased 2.5 percent year-on-year to reach US$4.1 trillion between January and August – was offset by strong exports to emerging markets, in particular ASEAN, India, and Africa, as well as the EU. Total trade with ASEAN grew 8.6 percent year-on-year in the first eight months, with Vietnam, Thailand, and Indonesia all recording double digit growth. Chinese exports to Africa soared 24.5 percent year-on-year in the first eight months, while overall two-way trade was up 15.9 percent.
The latest trade data suggests supply chains are restructuring in the wake of Trump’s tariffs, with smaller markets increasing purchases of Chinese goods. However, it remains to be seen whether these smaller countries can offset the impact of the standoff with the US for Chinese exports in the long term, especially as the Trump administration increases scrutiny of Chinese reexports.
UPDATE (August 12, 2025): President Trump has signed an executive order extending the current tariff truce with China by another 90 days, moving the expiration date to November 10, 2025. The decision halts a planned escalation of tariffs—now capped at 30 percent on Chinese imports and 10 percent on US goods—in an effort to prevent economic disruption during the critical holiday trade season.
Without the extension, US duties on Chinese goods could have jumped to 145 percent, while China’s retaliatory tariffs might have risen to 125 percent, effectively approaching a trade embargo. The move comes as US retailers are stocking up for year-end sales, providing much-needed relief for supply chain planning.
Both Washington and Beijing have emphasized the importance of maintaining economic stability and allowing more time for negotiations. Analysts see the extension as laying the groundwork for a potential Trump–Xi summit later this year.
The US-China trade relationship has become increasingly turbulent amid rising geopolitical tensions and aggressive tariff policies. Since Donald Trump’s return to office in 2025, a new wave of protectionist measures has reignited a high-stakes trade conflict, sending shockwaves through bilateral trade flows. This article examines the recent developments in US-China trade, the impact of escalating tariffs on US imports from China, and the uncertain path forward as both sides navigate a fragile negotiation process and a rapidly evolving global trade environment.
The trade relationship between the US and China has been marred by volatility since Trump’s first term commenced in 2017. This relationship has been underpinned by Trump’s persistent attempts to reduce the US’s trade deficit with China, which led to the outbreak of the US-China trade war in 2018 and the imposition of Section 301 tariffs on hundreds of billions of dollars of Chinese goods. The Biden administrationsaw a temporary stabilization of relations and oversaw the largest monthly increase in US imports from China in September 2021, reaching US$56.5 billion in value.
A series of aggressive new tariffs has driven Chinese export volumes to the US into a sharp decline. On February 1, 2025, Trump signed an executive order imposing a 10 percent tariff on Chinese imports, citing national security concerns over fentanyl and precursor chemicals. These so-called “fentanyl tariffs” were later doubled to 20 percent, and in April, Trump unveiled sweeping new duties under the banner of “Liberation Day” trade reform, raising effective tariffs on Chinese goods to 54 percent. This was followed by tit-for-tat retaliation, culminating in an all-out tariff war in early April, with reciprocal rates soaring to 125 percent before both sides agreed to de-escalate.
The rapid escalation and volatility of US tariffs have had a pronounced impact on Chinese exports. In February, shipments to the US plummeted by 41 percent month-on-month following the introduction of a blanket 10 percent tariff. March saw a temporary rebound, likely driven by front-loading in anticipation of steeper tariffs in April. However, exports fell again by 17 percent in April and dropped an additional 12 percent in May, underscoring the ingoing impact of the tariffs.
In May, US and Chinese officials met in Geneva to negotiate a partial reprieve, agreeing to temporarily scale reciprocal tariffs back to 10 percent for 90 days. The Geneva agreement left the original 20 percent fentanyl-related tariffs in place, meaning the final tariff rate on Chinese goods remains at a minimum of 30 percent, in addition to existing Section 301 and Section 232 tariffs.
Following disagreements over the implementation of this deal, in particular surrounding the issuance of export licenses for rare earth metals to the US, the officials met once again in London in early June to formalize a framework to uphold this deal. As progress on a more lasting deal appeared to stagnate, US and Chinese officials confirmed in late June that the two sides had struck a deal, although no concrete details have been released as of writing.
From July 27 to 30, US and Chinese officials met in Stockholm to discuss the ongoing trade disputes, with the expectation that the August 12 deadline would be extended. While both sides expressed optimism that an extension would be granted following the meetings, Trump waited until August 11 to sign an executive orderextending the tariff truce with China by another 90 days to November 10, 2025.
Chinese exports to the US have recovered somewhat in the months since the trade truce has been in force. June and July saw a rebound in shipments to the US compared to the April to May period, accompanied by an overall surge in Chinese exports. In June, exports to the US surged by 32 percent from May, reaching US$38.2 billion. However, June and July shipments were still significantly lower than the previous year; June exports fell 16 percent year-on-year, July exports 21 percent.
China’s exports to the US in its four largest product categories–electrical machinery and equipment, nuclear reactors, boilers, and machinery, furniture and bedding, and toys and games–have seen a noticeable decline in recent months as the tariffs take their toll.
In May 2025, the year-on-year data reflects substantial contractions across all major export categories. Electrical machinery exports fell to US$5.45 billion, a sharp 42 percent drop from US$9.5 billion in May 2024. Nuclear reactors, boilers, and machinery followed a similar trend, declining by 36 percent from US$8.29 billion in May 2024 to US$5.3 billion a year later. The furniture sector experienced a 34 percent year-on-year decrease, falling from US$2.8 billion to US$1.84 billion. Toys and games also declined by 29 percent from US$1.92 billion to US$1.36 billion over this same period.
The export of key electronics such as smartphones and computers has also recorded sharp declines, despite Trump exempting many of these products from the additional reciprocal tariffs in early April.
In May 2025, exports of telephones and related hardware, which include smartphones, plummeted by 67 percent from US$3.4 billion a year earlier to just US$1.1 billion, according to data from ITC Trade Map. Shipments of these products have declined considerably across the first five months of 2025, declining from almost US$4 billion in January.
Exports of computers and related hardware have seen a similar–albeit less dramatic–drop over the first five months of 2025, despite also being exempted from the reciprocal tariffs. In May, exports in this category fell 43.4 percent year-on-year to US$2.1 billion, although this marked a modest rebound from the US$1.8 billion recorded in April. Overall, shipments declined 41 percent between January and May 2025, down from US$3.6 billion at the start of the year.
These reductions reflect both reduced US import demand and the structural impact of tariffs, which have made Chinese goods less competitive in the American market. The consistent month-on-month declines observed since early 2025 indicate more than seasonal variation—it signals the possible reshoring of production to third countries and changes to US import sourcing strategies.
The result of the worsening US-China trade relationship is a marked decline in the share of exports to the US in China’s overall exports, even as the latter figure has continued to rise. In May 2025, the proportion of Chinese exports to the US dropped to just 9 percent, according to data from China Customs, down from 18 percent in January 2017, when Trump first took office.
While the proportion of exports to the US has shrunk, exports to China’s largest trading bloc, ASEAN, have increased substantially. In May 2025, the proportion of Chinese exports to ASEAN countries reached 18 percent, up from 12 percent in January 2017.
ASEAN has also overtaken the US in overall export value, with the total monthly value of exports to ASEAN remaining consistently above that of the US since July 2022. In May, China’s exports to ASEAN reached US$58.4 billion, over the value of goods that were shipped to the US.
Although Chinese exports to the US have dropped both in overall volume and as a proportion of China’s total exports, the US is still by far the single largest export destination, far outpacing Vietnam, which is China’s largest export destination in ASEAN and the second largest single export destination, when excluding Hong Kong.
The share US imports from China has also shrunk considerably in the last five months. In May 2025, the share declined to just 7.1 percent in May 2025, the lowest level recorded since 2001 and down from almost 13 percent in January, with total imports for consumption shrinking to just US$19.4 billion, down by 43.5 percent from the same month in 2024.
At the same time, Vietnam’s share of US imports has grown, reaching 5.7 percent in May 2025, up from 4.2 percent in January and 3.9 percent a year earlier. May imports for consumption from Vietnam in May reached US$15.8 billion, up 34 percent year-on-year.
While Vietnam is witnessing a surge in exports to the US, much of this is believed to be fueled by reexports of Chinese goods. As the US seeks to close this route for Chinese exporters, both Vietnam’s shipments to the US and China’s shipments to Vietnam could see a hit in the coming months.
The recently announced US-Vietnam trade framework has the potential to significantly reshape regional trade flows, particularly by curbing China’s use of Vietnam as a transshipment hub. Under the agreement, the US will impose a 40 percent tariff on goods transshipped through Vietnam from third countries—primarily targeting Chinese exports that enter the US market after passing through Vietnam to evade direct US tariffs. While official definitions of “transshipment” remain pending, academic estimates suggest that around 16 percent of Vietnam’s exports to the US are Chinese-origin goods, indicating that a relatively small but strategically significant portion of bilateral trade could be affected.
This move marks a direct escalation of Trump’s long-standing efforts to close perceived loopholes in US tariff policy and cut off channels Chinese firms have used to avoid US tariffs going back to the first Trump term. On his first day back in office, Trump’s America First Trade Policy specifically called for measures against “circumvention through third countries,” with Vietnam widely seen as one of the main conduits. US officials have increasingly linked this issue to broader national security and industrial policy concerns, especially in sectors like steel, aluminum, and solar, where Chinese production dominates.
China has condemned the US-Vietnam deal in strong terms. On July 3, 2025, Ministry of Commerce (MOFCOM) spokesperson He Yong stated that China “firmly opposes any party reaching deals at the expense of China’s interests” and would “resolutely take countermeasures to safeguard its legitimate rights and interests” if such actions occur. Her remarks reflect Beijing’s growing unease as Washington increases the pressure on China’s key trading partners to curb imports from China.
Vietnam’s rising import volume from China—which reached US$161.8 billion in 2024, more than doubling from US$71.6 billion in 2017—underscores the interconnected nature of these economies. Many of these Chinese goods are inputs for Vietnam-based assembly or re-export, meaning the new tariffs could disrupt supply chains and discourage further Chinese trade through Vietnam. Moreover, Vietnamese exporters themselves could become collateral damage in the intensifying US-China trade conflict, particularly in industries where the US suspects high levels of Chinese value-added content.
The US had already begun taking measures aimed at curbing reexports of Chinese goods prior to striking this deal with Vietnam. In April 2025, the US Department of Commerce (DoC) announced final determinations in its investigations into anti-dumping (AD) and countervailing duties (CVD) on solar cells imported from Vietnam, Cambodia, Malaysia, and Thailand.
According to the DoC, the CVD investigation found that “imports of solar cells from Cambodia, Malaysia, Thailand, and Vietnam are being dumped into the U.S. market and receiving countervailable subsidies”. The investigation alleges that Chinese solar companies with operations in these four countries are receiving subsidies from China.
The AD and CVD rates range widely between companies and countries. For instance, CVDs range from a low of 14.64 percent on imports from Hanwha Q CELLS in Malaysia to 3,403.96 percent on imports from four companies in Cambodia. These enforcement actions highlight the US’s growing willingness to impose steep, sector-specific tariffs not just based on where goods are assembled, but on the origin of key components and underlying supply chains.
The trajectory of US-China trade remains fraught with uncertainty, with the current negotiations unlikely to fully reverse the multiple layers of tariffs on Chinese goods. Despite the successful de-escalation following meetings between US and Chinese officials in recent months, the prospects for a permanent rollback remain limited. Any long-term agreement will likely still include a minimum 10 percent reciprocal tariff, as this baseline rate applies to all imports, regardless of origin. Moreover, the 20 percent fentanyl-related tariffs have been explicitly excluded from current negotiations, while the pre-existing Section 301 tariffs, which continue to apply to a wide swath of Chinese goods, have not budged since Trump’s first term in office. As a result, even a successful conclusion to talks would leave Chinese exports facing tariffs of over 50 percent–considerably higher than the rates prior to Trump’s second term.
Beyond direct tariffs, the US’s strategy to reshape trade flows is increasingly targeting third-country intermediaries, as seen with the US-Vietnam trade framework. This is a significant escalation that signals the US’s growing effort to clamp down on indirect imports of Chinese goods. With Chinese firms deeply integrated into the manufacturing ecosystem in Vietnam and other third countries, further trade deals negotiated with China Plus One regions could further disrupt China’s exports and regional supply chains.
In the longer term, there is still the possibility that the US and China will reach a broader and more concrete trade deal, similar to the Phase One deal negotiated during Trump’s first term. This could see China agree to increase imports of American goods, particularly in agriculture and energy, in exchange for reduced tariff pressure.
Nevertheless, the broader implications for global trade and supply chains are already evident. The volatility and severity of the current tariff regime have prompted US importers to reconsider China as a primary sourcing destination. Meanwhile, the sustained drop in Chinese exports across major product categories to the US underscores a deeper structural shift, which could lead Chinese exporters to eschew the American market entirely and seek end customers in other regions, such as ASEAN and the EU.
In the longer term, continued US efforts to prevent reexports of Chinese goods and trace value-added content in third-country production may accelerate a global trend toward supply chain decoupling and reshoring. The US’s expansive interpretation of “country of origin,” as seen in its solar import rulings, could encourage multinationals to diversify production further or relocate capacity domestically.
For China, this means contending with direct trade restrictions while also adapting to shifting dynamics in the global manufacturing landscape. While some supply chains may move elsewhere in response to US policy pressure, China retains significant structural advantages, including its deep industrial base, logistics infrastructure, and integration with emerging markets, that will continue to anchor its role in global trade.
This article was originally published on July 10, 2025, and last updated on August 12, 2025.
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