(Yicai) May 14 -- Since United States President Donald Trump’s tariff war 2.0, the scale of bilateral trade between China and the US has remained high, but the degree of mutual dependence has declined significantly.

The US remains China’s largest single-country trading partner and biggest single export market, but its relative position in China’s foreign trade system has fallen sharply.

In 2025, bilateral trade volume between the two countries was about USD559.7 billion, accounting for 8.8 percent of China’s total foreign trade volume, down 2.4 percentage points from the previous year and 7 percentage points lower than when China joined the World Trade Organization in 2001. The proportion of bilateral trade volume between the two countries in the total foreign trade volume of the US fell to 7.4 percent, the lowest level since 2002.

Declining Trade Dependence

The degree of import and export dependence between China and the US has declined on both sides.

China’s exports to the US totaled USD420 billion, down almost 20 percent from the previous year, accounting for 11.1 percent of total exports, down 3.5 percentage points from a year earlier and the lowest level this century. Imports from the US were USD139.7 billion, down nearly 15 percent, accounting for 5.4 percent of total imports. Both figures hit their lowest levels this century.

On the US side, imports from China accounted for 9 percent of total imports, down 12.5 percentage points from the peak in 2017. The proportion of US exports to China in total US exports dropped to 4.9 percent, down 2.1 percentage points from the previous year and 3.5 percentage points from the 2017 peak.

The structure of the trade balance has also undergone significant changes. China’s overall trade surplus increased over 19 percent to USD1.2 trillion, but its trade surplus with the US decreased 22 percent from the previous year to USD280.4 billion, with its share of the overall surplus shrinking sharply from 35.4 percent to 23.7 percent.

The US overall trade deficit expanded to USD1.2 trillion, with part of it shifting to economies such as Mexico and Vietnam. High tariffs have reduced the trade deficit with China, but failed to narrow the total trade deficit, showing that the law of comparative advantage still holds true.

Supply Chain Resilience Remains Strong

China has mitigated pressure from weaker exports to the US through market diversification and product structure upgrades.

The share of China’s exports to the Association of Southeast Asian Nations, the European Union, and Africa in its total exports was 17.7 percent, 14.9 percent, and 6 percent, respectively, last year, up 1.2 percentage points, 0.4 percentage points, and 1 percentage point from the previous year.

Meanwhile, the impact of tariffs has varied significantly across different categories of goods. Consumer goods have been hit the hardest, with exports to the US down 22 percent from the previous year. Intermediate goods have shown relatively stronger resilience, with a decline of 12 percent, reflecting the continued stickiness of manufacturing supply chains between China and the US.

Manufacturing value added accounted for only 10 percent of the US gross domestic product in 2024, while household consumption has long remained at about 68 percent, leaving the country heavily dependent on imports to fill the gap in goods consumption.

China has the world’s most complete industrial system, with manufacturing value added accounting for 28 percent of the global total, making its advantages in supply chain coordination and cost control difficult to replace in the short term. Even if some industrial links are transferred to ASEAN economies, those economies still need to import large volumes of components and intermediate products from China.

The trade relationship between China and the US is not one of direct competition, but rather a deeply integrated division of labor within the industrial chain. Even if the US raises import costs through high tariffs, it will still be difficult in the short term to fully replace China’s manufacturing system, industrial support capabilities, and intermediate product supply.

The author, Luo Zhiheng, is the chief economist of Yuekai Securities.

Editor: Emmi Laine