U.S. & China: Captive on Both Ends

The U.S.–China relationship is usually described as a rivalry. Its core mechanism is a recycling machine — and the people who pay for it don’t get a vote on either side. In 2025, as tariffs climbed and “decoupling” became the organizing word of American China policy, China’s external surplus did not shrink. It hit a record. The trade surplus reached about $1.19 trillion on customs data — the largest any country has ever recorded — even as exports to the United States fell by roughly 29 percent under the tariffs. The total surplus grew anyway, the lost American sales made up by surging exports to the European Union, Southeast Asia, Africa, and Latin America (General Administration of Customs, January 2026). The current account surplus, measured the other way, was a record $735 billion (State Administration of Foreign Exchange). At the same moment, Beijing was conspicuously selling U.S. government bonds — its reported Treasury holdings fell below $700 billion, less than half the 2013…