(The Epoch Times)—As the Trump administration implemented tariffs to correct decades of trade imbalances with China, Beijing’s export-driven playbook is drawing fresh scrutiny around the world.
Analysts say China’s “beggar-thy-neighbor” strategy—expanding exports at the expense of other countries’ industries—is now met with growing international backlash, prompting other countries to consider new tariffs and defensive trade measures.
Export Surge Masks Trade Imbalance
The Chinese Communist Party (CCP) is preparing for its annual Central Economic Work Conference, and its newly released “15th Five-Year Plan” again highlights its ambition to build a “manufacturing powerhouse.” But analysts say the global environment is shifting drastically against Beijing’s model.
Despite high U.S. tariffs—reduced only slightly from 57 percent to 47 percent under a late-October agreement—China has adapted. Since the Trump administration first raised tariffs in 2017, Chinese exporters have increasingly routed goods through lower-income countries, shifting parts of their supply chains to Southeast Asia before re-exporting to the United States.
Official Chinese customs data published Dec. 8 reveal the consequences. China’s exports to the United States plunged 28.6 percent in November year-over-year. Yet, total exports rose 5.9 percent, beating expectations, because of soaring shipments to ASEAN members and the EU.
Imports, by contrast, grew just 1.9 percent—well below forecasts.
In a Dec. 6 column for The Wall Street Journal, chief economics commentator Greg Ip noted that while some U.S.-China data may be distorted by firms rushing to import before tariffs rise, the broader pattern is unmistakable. For five straight years, China’s exports have surged while its imports have stagnated. Beijing, he wrote, is expanding its share of global manufactured goods at the expense of other nations’ growth.
Goldman Sachs reached a similar conclusion in a recent forecast, saying China’s economic relationship with the rest of the world has turned negatively correlated—meaning that China’s gains increasingly come as other economies lose ground. As Beijing pushes its manufacturing sector to become even more competitive, the firm warned, the pressure will intensify on industrial economies in Europe, East Asia, Canada, and Mexico.
A Model Fueled by Subsidies and Political Strategy
Analysts say this aggressive export orientation is not new. Instead, it has become more extreme in recent years.
Elliot Fan, an economics professor at National Taiwan University, told The Epoch Times that Beijing has pushed its export-driven model to “a highly distorted level,” which includes manipulating the Chinese currency and deploying subsidies, tax breaks, and other industrial policies to keep manufacturing costs artificially low.
He cites two reasons: “One reason is that China’s economy has been declining in recent years, making exports the last remaining engine of growth, and that provides the regime with some political legitimacy. The second reason is that the CCP has realized that manufacturing can serve as a symbol of national strength while simultaneously weakening other countries’ industrial capabilities, such as the U.S. shipbuilding industry.”
“That model has gone on for years. Now the United States is no longer tolerating it, and other countries can’t absorb the impact either.”
Paul Chiou, an associate professor in economics at Northeastern University, told The Epoch Times that China’s price-driven export strategy has “disrupted the entire global economic order,” hollowing out labor markets elsewhere and weakening innovation in foreign manufacturing industries.
This model also reflects Beijing’s internal constraints, which include collapsing domestic consumption, deepening deflation, and severe industrial overcapacity in sectors such as steel, electric vehicles, and solar panels, among others.
“China’s economic strategy has always prioritized production over consumption,” Chiou said.
The post-pandemic reorganization of global supply chains has accelerated the shift. The world is splintering into trade blocs, Chiou noted. The United States and the EU are drawing closer, while China is relying more heavily on countries aligned with or isolated alongside it, such as Russia, Iran, North Korea, and small African states susceptible to pressure. Others, including India, Southeast Asia, and parts of Latin America and the Middle East, are attempting to balance between competing powers.
Growing International Resistance
China’s industrial overcapacity is increasingly seen as a global problem.
The Trump administration’s newly released National Security Strategy on Dec. 4 called for a rebalancing of U.S.-China economic relations and stressed reciprocity to restore “America’s economic independence.” The document urges allies—including the EU, Japan, South Korea, Australia, Canada, and Mexico—to adopt similar rebalancing measures, arguing that no region alone can absorb China’s immense surplus production.
The EU’s tone is also hardening. Fresh off a visit to China, French President Emmanuel Macron issued one of his strongest warnings yet, telling French business daily Les Échos that China’s trade surplus with Europe is unsustainable, particularly as Beijing imports fewer European goods.
“If they [China] don’t react, in the coming months, we Europeans will be obliged to take strong measures and decouple, like the U.S., like for example tariffs on Chinese products,” Macron said. He added that he had already discussed the issue with European Commission President Ursula von der Leyen.
The numbers are stark. France ran a €47 billion ($54.7 billion) goods trade deficit with China last year, according to Fortune Magazine, citing the French Treasury, while Chinese data showed that China’s surplus with the EU reached a historic $143 billion in the first half of this year.
Mexico is also signaling a shift. Its Congress is set to vote this week on a proposal by President Claudia Sheinbaum to impose new tariffs on Chinese imports, which is widely viewed as aligning more closely with U.S. trade policy.
Fan expects more countries to follow, deploying tariffs and non-tariff barriers as China’s model increasingly destabilizes global markets. With Beijing unwilling to address problems created by its overcapacity, he said that rising trade conflict is inevitable.
Can Beijing’s Current Trade Model Endure?
Recent assessments suggest the model may have a limited runway. In the 2025 Sustainable Trade Index released by the Hinrich Foundation and IMD’s World Competitiveness Center, China ranked 16th out of 30 major economies—lagging behind other Asian economic hubs.
The index evaluates countries based on economic openness, social resilience, and environmental sustainability.
Chiou noted that China is slipping across all three. Beijing is running large fiscal deficits with diminishing returns. Its property-market collapse is worsening, and China’s local governments face mounting debt risks. Meanwhile, weak social safety nets push the Chinese public to save heavily rather than spend.
“The CCP’s strategy of pushing exports won’t go far,” he said. “It assumes that once products are shipped abroad, there will always be buyers, but real economic prosperity ultimately depends on domestic consumption. In China, the money earned from exports is not shared by the whole population, and ordinary people cannot partake in the benefits of economic growth. So the more China exports and the more capacity it builds, the weaker domestic demand becomes. Once foreign trading partners raise barriers, China’s exports will run into serious obstacles.”
“Strengthening exports worked 30 years ago, but the era has changed. Export expansion alone cannot save the economy.”
Fan offered a similarly bleak outlook. By repeatedly disrupting global trade norms, Beijing has ensured international pushback, he noted. Over time, the global system will find a new equilibrium—one far less favorable to China.
“The CCP is likely to face a very dark period,” he said. “Because when international markets close off and domestic demand is insufficient, this model either collapses or is forced into transformation. It’s only a matter of time.”
