On December 10, 2025, at a packed Atlantic Council event, US Trade Representative Jamieson Greer took the stage to address a topic that’s been dominating headlines and rattling markets: the ongoing, often tense, economic relationship between the United States and China. Despite a year marked by aggressive tariffs, export controls, and a flurry of policy maneuvers from both sides, Greer offered a message that was, at least in tone, more measured than many expected. “Even with China’s unfair trade practices, the United States and China still should trade,” Greer said, according to the Atlantic Council’s coverage. “Just... it needs to be managed.”
That word—managed—captures the spirit of the past year’s trade saga. The Trump administration, true to President Donald Trump’s campaign promises, has doubled down on tariffs and tough talk, aiming to shrink a trade deficit that, for years, seemed only to balloon. Yet, as 2025 draws to a close, the results are more complicated than any single soundbite can convey.
According to CNN, China’s response to tariffs and trade pressure has been anything but passive. In fact, Chinese exporters, bracing for impact, raced to ship goods abroad in the months following Trump’s electoral victory. The outcome? A record-shattering trade surplus for China: $1 trillion in just the first eleven months of the year, a milestone no other country has reached. Even with an 18.3% plunge in shipments to the US, China’s overall exports surged 5.7% year-over-year, thanks to booming sales in Europe (up 8.9%), Southeast Asia (14.6%), and Africa (27.2%).
This pivot, analysts say, was no accident. Under President Xi Jinping, China has leaned heavily on its formidable manufacturing base and the “Made in China 2025” strategy, which has poured billions into high-tech sectors. Wang Jun, deputy head of the General Administration of Customs, credited the country’s “comprehensive industrial supply chain, momentum generated by higher-tech sectors, and the determination of exporters who press ahead despite challenges” for this export boom, as reported by CNN. Meanwhile, Hu Xijin, a prominent nationalist commentator, declared on social media, “The competitiveness of Chinese products cannot be wiped out by trade protectionism. Their quality and low prices offer an irresistible appeal, and market forces determine that China’s supply chain is unmatched in today’s world.”
Back in Washington, Greer emphasized that the Trump administration’s actions aren’t about “blowing up everything,” but rather about recalibrating an imbalanced relationship. “The landing zone with China is really we just have more balanced trade,” he argued, highlighting that the US trade deficit with China is expected to be down 25 percent by the end of 2025. He pointed to other signs of progress too: manufacturing’s share of US GDP is up, with select sectors like cars, pharmaceuticals, and semiconductors reshoring production. “A lot of other manufacturing... comes along with it,” Greer added, noting that manufacturing jobs in the US “on average pay more than services jobs.”
Yet, while American officials tout the benefits of tariffs and reshoring, China’s export machine shows no signs of slowing—at least for now. But this resilience masks deeper troubles at home. As CNN reports, China’s property sector is in its fifth year of slowdown, youth unemployment remains stubbornly high, and deflation is squeezing profits in industries from electric vehicles to e-commerce. Imports, a proxy for domestic demand, have barely budged—up just 0.2% year-over-year—revealing a society that’s exporting its way out of sluggishness rather than relying on robust internal consumption.
Economists warn that some of China’s export gains may be less than meets the eye. A significant portion of goods now reach the US via roundabout routes—transshipped through Southeast Asian countries like Vietnam, where they undergo additional processing before being re-exported. This “transshipment” makes it harder for US authorities to enforce tariffs and has prompted the Trump administration to strike deals on transshipment tariffs with countries like Vietnam. Still, as CNN notes, the true scale of these rerouted exports is tough to pin down, complicating enforcement and policy responses.
Meanwhile, the trade fight is far from limited to the US and China. Greer expressed disappointment with the European Union’s digital regulations, particularly after the EU fined social media platform X under its new Digital Services Act. “With respect to our companies, we’re going to regulate our companies,” Greer insisted. “We’re not going to allow that regulation to be outsourced.” He also made clear that the US will act in its own interests, even if that means diverging from allies: “If we align in a way that helps America, great. If not, we’re going to take our own actions.”
Protectionist sentiment is rising elsewhere, too. The EU has already imposed tariffs and anti-dumping measures on Chinese electric vehicles and other exports, and French President Emmanuel Macron recently warned of “unbearable” trade imbalances with China, hinting at further tariffs to come. Other countries, from India to Brazil, are also raising red flags about Chinese “dumping.”
As for North America, the US-Mexico-Canada Agreement (USMCA) is set for review in 2026. Greer indicated that the US will likely negotiate separately with Canada and Mexico, acknowledging the distinct economic relationships at play. He didn’t rule out any options—including withdrawal from the agreement—underscoring the administration’s willingness to keep all tools on the table.
Amid these crosscurrents, both the US and China face uncertain futures. The Trump administration’s tariff “project,” as Greer called it, is far from over. He hinted at more movement in 2026 and suggested that, should the Supreme Court block tariffs issued under the International Emergency Economic Powers Act, alternative legislative or executive tools would be deployed to maintain roughly $200 billion in tariff revenues. “It’s not crazy to have revenue helping to fund your government,” Greer said, referencing America’s long history with tariff-based funding.
China, for its part, is looking ahead to its next five-year economic blueprint, set to be unveiled in March 2026. According to a readout from the Central Economic Work Conference, the nation faces “a noticeable contradiction between strong supply and weak demand domestically, along with significant risks in key areas.” The government has pledged a “more proactive fiscal policy” and “moderately loose monetary policy” for the coming year, with priorities focusing on economic strength, technology, national defense, manufacturing, aerospace, transportation, and cyberspace.
For all the tough talk and tariff tit-for-tat, the US-China trade story remains one of adaptation and resilience on both sides. Each country is maneuvering to shore up its own vulnerabilities, whether by reshoring factories or rerouting exports. The world’s two largest economies remain inextricably linked, even as they jostle for advantage and brace for another year of uncertainty and change.
