U.S.-China Summit This Week
When Presidents Donald Trump and Xi Jinping meet in Beijing, trade, for once, won’t be the primary topic. Among more severe crises in play are the U.S. war with Iran, the rise of artificial intelligence, and China’s desire to annex Taiwan. After the Trump’s imposition of triple-digit tariffs last year, Beijing and Washington agreed to a one-year trade truce in October that imposes tariffs averaging 47% on Chinese exports to the U.S. and around 30% on goods going the other way.
China Boosts Exports
This weekend, China said its exports to the rest of the world had increased 14.1% year-on-year to $359.4 billion. That was a surprisingly strong performance for a Chinese export economy that’s struggled to find its footing this decade. In March, exports increased only 2.5%, and a group of economists recently interviewed by the Wall Street Journal summoned an estimated expansion for April of only 8%. China’s manufacturers had suffered more than most from the conflict in the Middle East and the difficulty navigating the Strait of Hormuz.
Trade to the U.S. Recovers
Exports to the U.S. rose 11.4% to $36.8 billion. In the first quarter of 2026, by contrast, shipments to the U.S. dropped 16.3% to $96.7 billion. What’s going on here? In part, it signals a stabilization after the hard dip caused by tariffs a year ago. April 2025 is when Chinese exports to the U.S. really got hit: That month Chinese exports to the U.S. dropped 21.1% to $33 billion. By comparison in March 2025, they increased 8.7% to $40 billion. With a lower baseline, expect Chinese exports to the U.S. to stay flat on increased slightly year-on-year. To be sure, last year, despite the slowdown in trade with the U.S., China set a record with a $1.2 trillion trade surplus.
But the April numbers suggest that the U.S. could be losing leverage. Before Trump, the U.S. had imposed some of the lowest tariffs in global economic history, the result of its postwar liberalization philosophy. The U.S. under Trump has used the negotiating power offered by those low tariffs to exact concessions from enemies and friends. Now, however, “China looks to have more leverage,” Capital Economics wrote in a report. “Higher tariffs haven’t stopped China’s exports from continuing to surge over the past year, and Beijing has showed that it is prepared to wait out U.S. pressure.”
Semiconductors and Cars
The rest of China’s trading partners gobbled up cars, semiconductors, and other high-tech goods the country is currently manufacturing. Shipments to the European Union increased 13.6% to $53 billion, and sales to ASEAN nations rose 15.4% to $69.5 billion. Exports to Brazil increased 37.1% to $7.8 billion.
Exports of “automatic data processing machines and parts thereof” increased 47.7% to $23.8 billion. Shipments of high-tech products spiked 39.3% to $104 billion. Exports of motor vehicles increased 44% to $16.1 billion. By contrast, sales of ag products increased 3.8% to $8.8 billion.
China’s Buying
China’s economy imported $274.6 worth of goods in April, up 25.3% year-on-year, after rising 27.8% in March. The Wall Street Journal economists had predicted a rise of 16%.
China is importing components for its booming tech industry. Imports of high-tech products rose 42.1% to $95.9 billion. Imports from the EU increased 14.6% to $23 billon, purchases from the U.S. increased 9.4% to $13.7 billion, and shipments from ASEAN countries rose 29.1% to $42.7 billion. Imports from India rose 32.3% to $2.3 billion. But there are signs that the Strait of Hormuz closure is having an impact. Imports of crude petroleum, most of it from the Middle East, dropped 19.9% to 38.5 million tons. Imports of natural gas, from countries like Russia, increased 83.1% to 8.4 million tons.
As always, when he arrives in Beijing, President Trump will ask China to buy more American goods. With duties already on the board, and courts in the U.S. now limiting his tariff power, the trade war, if not over, has become much harder for the U.S. to fight.