China-US Trade Shows Gradual Rebalancing Amid Tariffs and Geopolitical Challenges

China-US trade is undergoing a gradual adjustment, with analysts and business leaders noting signs of slow recalibration rather than a full-scale decoupling. Rising tariff barriers, technology restrictions, and heightened geopolitical uncertainty are reshaping bilateral trade flows, making them more structurally complex.

Experts point out that growth in China’s exports to the United States has moderated, with some manufacturing orders shifting to alternative markets as global supply chains are reconfigured. Meanwhile, China continues to have significant potential to increase imports of US energy and agricultural products, alongside expanding engagement in services trade and premium consumption sectors.

Yan Xuetong, a professor at Tsinghua University’s Institute of International Relations, noted that the evolving pattern indicates a gradual rebalancing of trade away from a model dominated by China’s surplus in manufactured goods toward a more diversified structure, supported by broader product categories and two-way demand.

Official data show that China-US trade fell 18.2 percent year-on-year to 4.01 trillion yuan ($578 billion) in 2025, accounting for 8.8 percent of China’s total trade by value, according to the General Administration of Customs. Analysts say this decline reflects structural adjustment pressures rather than a collapse in bilateral trade.

John Quelch, executive vice-chancellor and economics professor at Duke Kunshan University, highlighted energy and agriculture as emerging areas for cooperation, noting the US’ aim to expand energy exports while China seeks stable, diversified energy supplies. He also pointed to technology, particularly semiconductors, as a complex and potentially contentious aspect of the trade relationship, with export controls and market access expected to be negotiated generation by generation.

Sun Lipeng, deputy director of the Institute of American Studies at the China Institutes of Contemporary International Relations, emphasized that the ongoing recalibration reflects market-driven adjustments alongside policy constraints, not a wholesale decoupling.

Data also underline the resilience of bilateral trade. Lyu Daliang, director of statistics and analysis at the General Administration of Customs, said China remained the US’ third-largest export destination and third-largest source of imports in 2025, while the US was China’s largest goods export destination and third-largest import source.

At a recent news conference in Beijing, Wang Zhihua, director of the foreign trade department at China’s Ministry of Commerce, reaffirmed China’s readiness to work with the US through the China-US economic and trade consultation mechanism to manage differences, deepen cooperation, and promote stable, sustainable trade relations.

Businesses are adapting to this shifting environment. US specialty chemicals manufacturer Milliken & Co plans to strengthen its technical, supply chain, and customer support in China while advancing a “localization , China serving Asia” framework to improve operational agility and service efficiency. Simon Oram, vice-president of Milliken’s coating additives business, noted, “China is not only one of the world’s largest coatings markets but also a hub for green technology innovation.”