Clearly, China blowing past his tariffs in 2025 to rack up a record $1 trillion trade surplus wasn’t on Donald Trump’s bingo card. Chinese leader Xi Jinping’s economy did it in just 11 months. That, while scoring yet another delay in trade deal talks – this one for 12 months. It means that the earliest the US president could hope for a ribbon-cutting ceremony with Xi is early 2027.
Yet, Xi’s Communist Party also knows that this same playbook won’t work in the 12 months ahead. Trump’s trade war is hitting US households hard, and demand from elsewhere is unlikely to enable China to export its way to 5% growth. This has Xi turning inward and relying on reforms to get households to deploy US$22 trillion in savings, which is key to ending deflation.
