Despite steep US tariffs and rising political tensions, Chinese exports to the US continue to flow at remarkable levels – highlighting Beijing’s continuing grip on key global supply chains.
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Six months into former President Donald Trump’s renewed trade war, China is still shipping nearly $1 billion worth of goods to the United States daily, according to data cited by Bloomberg. Exports rose in September compared to August, defying expectations that average US tariffs of 55% would limit trade.
While overall trade between the United States and China has declined sharply this year, China’s dominance in strategic sectors – from rare earths and electronics to critical manufacturing materials – has proven difficult to replace. Analysts say that gives Beijing short-term bargaining power as trade negotiations continue.
“China’s strong position in global supply chains gives it some negotiating power with U.S. importers in the near term,” Bloomberg economists Zhang Xu and David Chu wrote. “Reorganizing production will take time.”
This influence comes at a pivotal moment. The two countries are preparing for talks to extend a 90-day tariff truce that expires in November. In the third quarter alone, Chinese companies exported more than $100 billion in goods to the United States, helping keep the Chinese economy on track to meet growth goals and expand the bilateral trade surplus to $67 billion.
Meanwhile, Trump expressed optimism about reaching a “good deal” at an expected meeting with President Xi Jinping at a summit in South Korea next week, although he warned that discussions could falter.
Cracks in the tariff wall
Despite strict tariff measures, many American companies continue to source their products from China. Analysts say loopholes and transshipment routes through Mexico and Vietnam have helped some importers reduce tariffs.
“There are a lot of loopholes,” said Zhaoping Xing, chief strategist at ANZ Bank. “U.S. Customs doesn’t have enough manpower to handle it.”
Chinese data also shows surprising resilience in specific sectors. Exports of e-cigarettes, e-bikes and refined copper cathodes rose in the last quarter. Exports of electrical cables jumped 87% to $405 million, while shipments of smartphones, laptops and computer parts totaled nearly $8 billion – a large number considering the heavy tariffs.
Even after Washington ended the “de minimis” rule that allowed small packages to enter duty-free, American consumers continue to buy from Chinese e-commerce giants such as Shen and Temo. Since May, about $5.4 billion in small packages have been shipped to the United States, despite the 54% tax.
Gradual but uneven separation
However, the broader trend points towards a slow decoupling between the world’s two largest economies. US imports from China have fallen to about $320 billion this year – compared to levels seen in 2017, before Trump’s first round of tariffs.
Some sectors are already shifting production elsewhere. Gaming console makers such as Nintendo and Microsoft now manufacture primarily in Vietnam, while exports of LCD TVs from China to the US fell by 73% in the last quarter.
However, analysts point out that a complete breakup remains unlikely. “The two sides may reduce dependence on each other, but it cannot be reduced to zero,” Xing said.
According to the International Monetary Fund, the current contraction in US-China trade has been more severe than the tariff shock of 2018-2019, suggesting that this phase of decoupling could be deeper and longer-lasting.
