Despite the imposition of high US tariffs, China’s export engine has proven to be unstoppable, leading to a record $1.2 trillion trade surplus. With access to the US market curtailed, Chinese manufacturers have shown their adaptability by redirecting their exports to new markets, including India, Africa, and Southeast Asia. This surge in exports has caused alarm among other nations, which are now under pressure to protect their domestic industries from the influx of cheap Chinese goods.
While some countries are considering action, others are treading carefully to avoid a separate trade war with Beijing. India, for example, has received 50 applications for investigations into dumping by Chinese and Vietnamese goods. Officials and experts note that countries already in negotiations with the US are reluctant to take on an additional trade conflict. Furthermore, China is using both diplomatic and economic leverage to dissuade countries from taking outright retaliatory measures.
The article notes that China’s exporters are “extremely competitive” and can absorb some of the tariff impact, while also finding workarounds like transshipment and relocating production to other countries. However, this export boom is not necessarily translating into higher profits for Chinese firms. The export explosion could also undermine Beijing’s domestic efforts to rebalance its economy towards stimulating consumption.