Key Takeaways:
- China’s trade surplus hit $938.1 billion in January–September 2026 (a record $133.53 billion in September alone), driven by higher-value exports such as semiconductors (+108.1 percent) and automobiles (+50 percent), underscoring manufacturing strength that US tariffs alone cannot erase.
- Diversification is key: September exports rose 52.3 percent to ASEAN, 25.3 percent to the EU and 39.6 percent to the US, while BRICS intra-trade reached about $1.17 trillion in 2024; 2025 data showed Chinese exports shifting from the US to other regions, though BRICS is not a unified bloc.
- A large surplus signals China’s industrial edge but not automatic global primacy—the US retains advantages in finance, the dollar and high-value services—so lasting competitiveness requires US gains in productivity and manufacturing, not tariffs alone.
China’s trade surplus reached US$938.1 billion during January–September 2026. In September alone, its surplus reached a record US$133.53 billion, with exports growing 36.3 percent compared with the previous year. China could once again record an annual surplus of more than US$1 trillion.
This surplus highlights a fundamental problem for the economic strategy of the United States (US). Tariffs can restrict Chinese products’ access to the US market, but they do not automatically eliminate China’s manufacturing advantages or control Beijing’s trade with the rest of the world. Thus, the US-China economic competition cannot be won through tariffs alone, because China’s strength rests on industrial capacity, market diversification, and the expansion of trade networks with developing countries, including BRICS members. However, a large surplus does not necessarily mean that China will replace America as the world’s leading economic power.
The surplus is supported by China’s export performance, which is increasingly driven by higher-value-added products. During the first nine months of 2026, China’s semiconductor exports increased by 108.1 percent, while automobile exports grew by more than 50 percent in both value and volume. Demand for artificial intelligence (AI), data centers, and industrial equipment has also supported this expansion.
China has an advantage in its integrated manufacturing ecosystem, ranging from components, infrastructure, and logistics to mass production. Therefore, tariffs that raise the prices of Chinese goods do not immediately enable US producers to replace the entire supply in a short period. On the other hand, the trade surplus also reflects an imbalance between production and domestic demand. If industrial capacity grows faster than household consumption, companies will become increasingly dependent on overseas markets to absorb their output.
The Role of ASEAN and BRICS
Market diversification has become an important part of the resilience of China’s exports. In September 2026, China’s exports to ASEAN increased 52.3 percent year-on-year, while exports to the European Union rose 25.3 percent. Exports to the United States also increased 39.6 percent in the same month.
This is where the position of BRICS becomes relevant. The group, whose members include China, India, Brazil, Russia, Indonesia, and several other countries, provides space for the development of trade, investment, and industrial cooperation beyond traditional relations with Western countries.
According to the United Nations Trade and Development (UNCTAD), trade in goods among BRICS members reached around US$1.17 trillion in 2024, an increase of more than 13 times compared with 2003. China is one of the main drivers of intra-BRICS trade. This network has the potential to expand markets for Chinese manufactured products while strengthening relations with countries supplying energy, minerals, and raw materials. However, intra-BRICS trade figures should not be equated with China’s surplus. Trade among members includes exports and imports in both directions, whereas a surplus is the difference between a country’s exports and imports.
BRICS is also not yet an integrated trade bloc like a single market. Its members have different interests, while regulatory and trade barriers continue to limit integration. Therefore, BRICS’s influence on China’s surplus lies mainly in opportunities for market diversification and stronger economic relations, rather than in a single collective policy that directly generates the surplus.
On the other hand, the imposition of US tariffs also faces structural limits.
The experience of 2025 illustrates this mechanism. The European Central Bank (ECB) recorded that China’s exports to the US fell 20 percent throughout 2025, while exports to ASEAN increased 13 percent, to Africa 26 percent, and to Latin America 7 percent. These data show a geographical shift in trade. However, the ECB also cautioned that evidence of export diversion resulting from tariffs was uneven, with significant impacts found mainly in ASEAN and Africa. Some of the increase in trade through third countries may also reflect changes in production or shipping routes, rather than the creation of entirely new demand.
This means that tariffs can indeed suppress bilateral trade, but their impact on China’s total exports depends on companies’ ability to find alternative markets, alter supply chains, and maintain competitiveness. For the US, trade policy needs to be accompanied by improvements in productivity, investment in technology, workforce education, and domestic manufacturing capacity. Without these measures, import restrictions risk increasing costs for American companies and consumers without resolving structural competitiveness problems.
Will China Overtake America?
A trade surplus alone is certainly not sufficient as an indicator for determining which country has the greatest economic power. The US still has advantages in financial markets, the international role of the dollar, high-value-added services, and several areas of research and technology. China has enormous manufacturing scale but faces challenges related to domestic demand and the property sector. Therefore, China’s surplus is more appropriately interpreted as an indicator of the strengthening of its industrial position rather than evidence that US economic leadership has ended.
The conflict in the Middle East adds another problem for Washington. Disruptions to energy supplies and shipping can increase production, transportation, and inflation costs. Military spending also carries an opportunity cost for domestic investment. However, there is insufficient basis to claim that US involvement in the Middle East directly causes China’s surplus. China itself faces the risk of higher energy costs and trade disruptions.
China’s surplus also shows that the global economy is increasingly influenced by diverse production and market networks. ASEAN and BRICS can expand trade opportunities, but they also face the risk of dependence on Chinese manufactured products.
Thus, the challenge for the US is not simply to reduce imports from Beijing, but to strengthen its productive capacity and economic partnerships. For developing countries, the greatest opportunity is to leverage this competition to increase investment, technology, and higher-value-added exports. The US$938.1 billion surplus is not proof that China will inevitably become the world’s strongest economic power. However, it demonstrates one reality: in an interconnected global economy, tariffs can restrict one trade route, but they cannot by themselves stop the rise of a country’s industrial sector.
