The annual trade deficit of the United States with China in 2025 decreased to its lowest level in over two decades. At the same time, the trade deficit with Mexico and Vietnam reached historical highs. These changes are a direct result of the extensive tariffs implemented by President Donald Trump to restructure the global trading system.
This is reported by Finway
Redistribution of Trade Flows and the Impact of Tariffs
According to official data from the US Department of Commerce released on February 19, last year the trade deficit of the US with China was approximately $202 billion. This is the lowest level since the early 2000s. Meanwhile, Canada’s trade surplus with the US has significantly decreased, which is related to supply chain complications, despite the USMCA agreement signed by Trump with North American neighbors during his first presidential term.
At the same time, Taiwan’s trade surplus with the United States nearly doubled last year. This is attributed to a strong increase in imports of semiconductors and electronic goods necessary for the development of artificial intelligence technologies. Taiwanese companies took advantage of tariff exemptions, which supported their exports to the US.
Trump’s Strategy and Changes in Global Trade
During his second presidential term, Donald Trump continues to use trade tariffs as a tool to reduce the American economy’s dependence on imports, stimulate domestic investment, and improve the situation in the US manufacturing sector, which has long shown a decline in employment.
Bloomberg Economics experts note that the average effective tariff rate on imports to the US currently stands at 13.6%. This is a record high for the country since the 1940s.
“China’s trade surplus with the US has been shrinking since Trump’s first term, when the trade war between the two countries prompted China to increasingly redirect exports through third countries, including Mexico and Vietnam.”
Thus, the strict tariff policy of the US has led to a significant restructuring of global trade flows. China is now increasingly using Mexico and Vietnam as transit countries for exporting its products to the American market, which has affected the trade balance statistics of the US with these countries.