The China shock may get worse but trade has proven resilient and globalization just can’t be reversed

Subscribe to enjoy similar stories. The good news for China is its export machine is still very much a going concern. It might even be described as thriving, despite US tariffs.

Just as well, given domestic conditions reveal an economy struggling for traction. Growth in the fourth quarter was the slackest since China’s re-opening from covid in 2022. Still, the trade surplus last year exceeded $1 trillion, a record sum that’s rich with implications.

Measured by China’s unabated despatch of goods across the world, globalization hasn’t been undone by the levies imposed by the White House. It keeps absorbing setbacks, as does the world economy. That’s a relief given the host of dire predictions that accompanied the imposition of duties last April.

US President Donald Trump, however, keeps testing the system’s durability. Over the weekend, he pledged tariffs against European nations that oppose his insistence that he acquire Greenland one way or another from Denmark. Few have escaped Trump 2.0 completely unscathed.

While trade will expand this year, it’s projected to do so at a slower clip. And patterns are evolving, some of them in ways bound to create new dislocations. China’s sales to the US plunged in December; America’s share of total exports fell to a historic low of 11% last year.

If the world’s largest consumer market has waned considerably, where do all these products churned out by factories go? Shipments to Southeast Asia jumped 13%, to the EU by 8% and the UK by a similar magnitude. That’s encouraging on one level. We aren’t enduring a repeat of the 1930s, when barriers went up almost everywhere.