The United States' waning influence is leaving China's trade surplus to wreak havoc on manufacturers worldwide. The Chinese export juggernaut, fueled by President Xi Jinping's mercantilist policies, has become a double-edged sword. While it may boost Chinese economic growth, the sheer scale of its exports is straining global manufacturing infrastructure.
China's trade surplus ballooned by 20% in 2025 to $1.2 trillion, a staggering amount that has triggered antidumping investigations from over 300 low- and middle-income countries. The surge in Chinese exports has led many countries, including Mexico and India, to impose tariffs on its goods. The European Union is now on the same page as the US, advocating for reform of the World Trade Organization (WTO) to combat China's "unfair" trade practices.
The irony lies in the fact that China's export-led strategy may ultimately harm its own economy. Business investment is yielding diminishing returns, with each additional job requiring increasingly large amounts of capital. This is squeezing prosperity from ordinary Chinese citizens, who make up only 40% of GDP, compared to 60% across developed nations.
As the US retreats into itself, China has an opportunity to step forward as a global leader in a new trading system. However, by sticking rigidly to its export-led strategy, Beijing may validate the US's withdrawal from the global economy and further erode faith in the WTO.
The situation highlights the need for China to reconsider its mercantilist policies, which are mopping up global demand for its products at the expense of other countries' manufacturing industries. By opening up its domestic market and committing to stronger, more reciprocal trade practices, China can help preserve the open trading system that has lifted billions out of poverty worldwide.
Ultimately, the fate of globalization hangs in the balance, with China's choices holding significant sway over the course of economic history. As the world waits with bated breath for Beijing's next move, one thing is certain: the world needs an engaged and constructive China to help stabilize the global trading system.
China's trade surplus ballooned by 20% in 2025 to $1.2 trillion, a staggering amount that has triggered antidumping investigations from over 300 low- and middle-income countries. The surge in Chinese exports has led many countries, including Mexico and India, to impose tariffs on its goods. The European Union is now on the same page as the US, advocating for reform of the World Trade Organization (WTO) to combat China's "unfair" trade practices.
The irony lies in the fact that China's export-led strategy may ultimately harm its own economy. Business investment is yielding diminishing returns, with each additional job requiring increasingly large amounts of capital. This is squeezing prosperity from ordinary Chinese citizens, who make up only 40% of GDP, compared to 60% across developed nations.
As the US retreats into itself, China has an opportunity to step forward as a global leader in a new trading system. However, by sticking rigidly to its export-led strategy, Beijing may validate the US's withdrawal from the global economy and further erode faith in the WTO.
The situation highlights the need for China to reconsider its mercantilist policies, which are mopping up global demand for its products at the expense of other countries' manufacturing industries. By opening up its domestic market and committing to stronger, more reciprocal trade practices, China can help preserve the open trading system that has lifted billions out of poverty worldwide.
Ultimately, the fate of globalization hangs in the balance, with China's choices holding significant sway over the course of economic history. As the world waits with bated breath for Beijing's next move, one thing is certain: the world needs an engaged and constructive China to help stabilize the global trading system.