In a year marked by escalating trade tensions and shifting global alliances, Chinese manufacturers have managed to turn adversity into opportunity. Despite the Trump administration’s sweeping tariffs—among the steepest since World War II—China’s exports have surged to new heights, flooding markets from India to Africa and Southeast Asia. This remarkable resilience is sending shockwaves through the global economy, prompting governments to weigh their own responses even as they remain wary of antagonizing Beijing, their top trading partner.
According to The Economic Times, Indian purchases of Chinese goods hit an all-time high in August 2025, while shipments to Africa are on track for an annual record. Sales to Southeast Asia have exceeded their pandemic-era peak, underscoring China’s ability to find new buyers as access to the US market has tightened. The numbers are staggering: in July alone, Chinese firms shipped almost $1 billion worth of computer chips to India, and the total value of exports to India is poised to surpass last year’s record, nearly matching the entire sum for 2021.
This export boom, however, is not without its challenges—or its critics. In recent weeks, Indian authorities have received 50 applications requesting investigations into goods dumping from countries such as China and Vietnam. Indonesia’s trade minister, alarmed by viral videos of Chinese vendors planning to export jeans and shirts for as little as 80 US cents to major cities, has pledged to closely monitor the influx of goods. Mexico, for its part, has imposed tariffs as high as 50% on Chinese products including cars, auto parts, and steel, making it the only country to publicly retaliate so far in 2025.
Yet, as Bloomberg Economics analysts Chang Shu and David Qu note, the scope for more meaningful action remains limited. Many countries are already embroiled in their own tariff negotiations with the Trump administration and are reluctant to open a new front with the world’s second largest economy. "Beijing will likely hit back with reciprocal tariffs immediately, but that risks alienating partners at a time when it critically needs allies," they observed. Over time, this dynamic may encourage companies to localize production in countries that remain on friendlier terms with China.
For Chinese manufacturers, the export surge has come at a cost. Profits at industrial firms fell 1.7% in the first seven months of 2025 as companies slashed prices to move excess inventory abroad, a strategy aimed at reducing overcapacity under President Xi Jinping’s “anti-involution” campaign. This price-cutting is exacerbating China’s persistent deflation, now on track for its longest spell since the country began opening up in the late 1970s. The export explosion could also undermine Beijing’s efforts to rebalance its economy toward stimulating domestic consumption—a priority for US Treasury Secretary Scott Bessent, who has urged China to make boosting its own consumer market a cornerstone of its next five-year plan.
Amid these shifting tides, the Organization for Economic Co-operation and Development (OECD) offered a surprisingly optimistic outlook on September 23, 2025. The Paris-based organization raised its world economic growth forecast for the year to 3.2%, up from a previous estimate of 2.9%. The OECD credited the global economy’s resilience to “front-loading,” where companies rushed to import goods before Trump’s tariffs took effect. Strong investments in artificial intelligence in the US and increased government spending in China also played a role in cushioning the blow.
“The full effects of tariff increases have yet to be felt—with many changes being phased in over time and companies initially absorbing some tariff increases through (profit) margins,” the OECD cautioned in its report. “But (they) are becoming increasingly visible in spending choices, labour markets and consumer prices.” The organization expects global growth to slow to 2.9% in 2026 as the effects of front-loading wane and higher tariffs begin to bite, dampening investment and trade.
The US imposed a baseline 10% tariff on imports from around the world in April 2025, quickly escalating duties on dozens of countries. By August, the overall effective US tariff rate had soared to 19.5%, the highest level since 1933, according to the OECD. Despite the tough talk, the US has left the door open for negotiations, striking deals with Britain, Japan, and the European Union, among others. Talks with China remain ongoing, with a 90-day pause on tariffs as high as 145% currently in effect as both sides try to hash out a compromise.
Meanwhile, the OECD upgraded its growth forecasts for several major economies in 2025: the US to 1.8%, China to 4.9%, the eurozone to 1.2%, and Japan to 1.1%. However, the organization warned of significant risks ahead. “Amid ongoing policy uncertainty, a key concern is that bilateral tariff rates could be raised further on merchandise imports,” the OECD said. Inflation pressures from rising food and energy prices, high public debt, and risks to financial markets all loom large. On the flip side, reductions in trade restrictions or faster adoption of artificial intelligence technologies could help strengthen growth prospects.
Back in Asia, the ripple effects of Trump’s tariffs are being felt in unexpected ways. India, for instance, has emerged as a major beneficiary of shifting supply chains. Exports to China’s neighbor hit a record $12.5 billion last month, largely driven by Apple Inc.’s suppliers moving iPhone production to India. Yet, as The Economic Times points out, these companies still depend heavily on parts and tooling made in China, highlighting the tangled web of modern global manufacturing.
Arthur Kroeber, head of research at Gavekal Dragonomics, summed up the situation succinctly: “Protectionism from the US and other countries has turned into a paper tiger because Chinese exporters are extremely competitive. They can absorb some of the tariff hit and also have plenty of workarounds through transshipment and relocating late-stage production to lower-tariff countries.” Cambodia’s central bank governor Chea Serey echoed the delicate balancing act facing smaller economies reliant on Chinese investment and imports, telling Bloomberg Television, “We do import a lot from China. We also rely a lot in terms of foreign direct investment from China.”
Even as some goods are rerouted through Vietnam and other Southeast Asian nations to bypass tariffs, demand for China’s high-tech innovations continues to drive much of the recent trade surge. Rising sales to wealthy markets in Europe and Australia further illustrate Beijing’s ability to adapt, finding new buyers even as traditional avenues narrow.
As the world’s biggest economies continue to negotiate, the stakes remain high. China’s upcoming Communist Party meeting is expected to focus on its policy blueprint for the next half-decade, with the eyes of the world watching to see how Beijing will balance its export-driven strategy with the need to stimulate domestic demand. For President Xi, the risks may be considerable, but so too are the potential rewards. Demonstrating that China doesn’t need the US consumer strengthens his negotiating hand ahead of a high-stakes summit with President Trump in South Korea.
In the end, the global trading system is being reshaped in real time, with Chinese exporters, multinational corporations, and national governments all scrambling to adapt. Whether the current wave of exports marks a new era of Chinese dominance or merely a temporary reprieve remains to be seen. What’s clear is that, for now, China’s ability to weather the storm of tariffs and find new markets is rewriting the rules of international commerce.
