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Global Commodity Intelligence

Q2 2025 | APRIL - JUNE

U.S.-China Goods Deficit Widens to $295 Billion, Tariff Retaliations Mount

According to the latest data from the U.S. Census Bureau, the United States recorded a goods trade deficit of $295 billion with China in 2024. This represents one of the most significant bilateral trade gaps in recent history.

In 2024, U.S. exports to China totaled $144 billion, while imports reached $439 billion. This continues a decades-long trend that accelerated in the early 2000s following China's accession to the World Trade Organization (WTO) in 2001. Since then, the U.S. trade deficit with China has expanded rapidly, disrupted only briefly by global events such as the 2008 financial crisis, the onset of the U.S.-China trade war in 2018, and the COVID-19 pandemic in 2020.

The trade deficit remains despite multiple rounds of tariffs, trade negotiations, and policy interventions over the past six years. Notably, the tariffs initiated in 2018 by both countries appear to have had a limited long-term impact on reshaping the overall direction of trade flows. Although short-term disruptions occurred, robust U.S. demand for cost-effective Chinese goods and manufacturing specialization continues to outstrip American exports to China.

Analyzing the 2024 trade composition, the top U.S. exports to China include semiconductors and integrated circuits ($15.3 billion), energy products such as oil and LNG ($14.7 billion), and agricultural commodities like soybeans ($12.8 billion). These exports reflect China’s strategic interests, particularly in securing food supplies and maintaining electronics supply chains.

Semiconductors and integrated circuits remain prominent among U.S. exports to China, despite existing export restrictions on advanced chips critical for national security and AI applications. Legacy chips and lower-end integrated circuits, essential for consumer electronics, automotive, and industrial uses, are still actively exported. Additionally, indirect sales through licensing and contract manufacturers continue and, despite tighter controls, China remains a critical market for U.S. semiconductor revenue.

On the import side, China continues to dominate U.S. supply chains in consumer categories such as electronics, machinery, textiles, and household appliances. Despite growing efforts by U.S. companies to diversify supply chains toward Southeast Asia and Mexico, China remains the central hub for manufacturing scale, efficiency, and integrated logistics.

Tensions between the U.S. and China escalated recently, beginning with a 10% U.S. tariff in February that prompted China to impose duties on American energy and agricultural goods. By early April, the U.S. raised tariffs on Chinese imports to a cumulative 54%, leading to a 34% retaliatory tariff from China. On April 8, the U.S. responded with a steep hike, bringing tariffs on Chinese goods to 104%, further intensifying the trade conflict and deepening uncertainty around future economic relations. In response, on April 9, China imposed an 84% tariff on all U.S. goods, prompting a swift countermeasure later the same day from the U.S., which raised tariffs on Chinese imports to 125%, the most severe phase of the trade conflict. Simultaneously, the U.S. announced a 90-day pause on new tariffs for other countries, excluding China.

The trade relationship is expected to remain complex and politically sensitive. While there are ongoing efforts to build more balanced and resilient trade mechanisms, structural factors such as cost competitiveness, technology transfer barriers, and market access limitations continue to constrain trade. Unless there are significant shifts in either domestic production capabilities or trade policy frameworks, the U.S.-China trade imbalance will likely persist as a defining feature of the global economic landscape, subject to further fluctuations and diplomatic tensions. The recent rounds of tariff escalations have increased uncertainty, particularly following the recent escalation. With no clear path toward consensus, uncertainty looks likely to continue.