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Current Affairs

Trump tariffs cast shadow as US-China trade shrinks ahead of leaders’ meet

Direct trade between China and the United States continues its shrinking trend, new US government data showed on Thursday, as the anniversary of “Liberation Day”…

By Samantha Johnson / April 2, 2026
Direct trade between China and the United States continues its shrinking trend, new US government data showed on Thursday, as the anniversary of “Liberation Day” highlights how last year’s tariff escalations deepened tensions between the two global powers.
The figures come ahead of a planned leaders’ meeting in Beijing next month, where both sides are expected to explore ways to stabilise relations after a period of renewed economic strain.

The February international trade data by the US Census Bureau and the US Bureau of Economic Analysis, US federal agencies, showed one of the lowest monthly bilateral goods deficits with China in two decades, even as the overall US trade deficit expanded due to surging imports from alternative partners.

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The US goods deficit with China stood at US$13.1 billion in February, continuing a sharp decoupling trend. This is marginally up from January’s revised US$12.7 billion, but remains historically low.

This follows a landmark year in 2025, which saw a 32 per cent drop in the deficit to US$202.1 billion – the lowest level since the early 2000s.

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In February, China exported US$21.6 billion worth of goods to the US, while purchasing US$8.5 billion in American products.

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