China’s trillion-dollar tariff reversal is rattling markets

China just posted a record US$1.2 trillion trade surplus for 2025, despite tougher Trump-era tariffs.

Exports to the US fell, but Beijing quietly rerouted trade to Africa, Southeast Asia and Latin America while manufacturers shifted production to tariff-friendly hubs like Mexico.

With US inflation sitting near 2.7%, the real tension now is whether a renewed tariff spiral derails the Fed’s soft landing and who’s actually winning this trade war.