US-China Trade Almost Fully Halved from 2021 Peak

Trade between the U.S. and China has been almost fully cut in half since its October 2021 peak. The latest available trade data for October 2025 reveals the combined value of all goods exchanged between the two nations stood at $32.8 billion, which compares with the record peak of $64.7 billion in October 2021.

October is a significant month for U.S.-China trade because U.S. exports of soybeans to China typically peak during the month. In 2025 however, even though China has been buying U.S. soybeans, sales have been muted with the result exports have significantly lagged the typical seasonal boost seen in previous years.

That outcome is a direct consequence of the tariff war between the two nations. Part of China’s trade war strategy has been to purchase soybeans from other nations, with Brazil gaining much attention from China’s soybean purchasers.

The following chart shows how the combined value of trade between the U.S. and China stands through October 2025 in the context of how trade between the nations has developed since January 2017.

The chart features a counterfactual of how the rolling twelve month average value of goods exchanged between the U.S. and China would have grown in the absence of the global tariff war between the two nations. Through October 2025, we find the gap between that counterfactual and the actual trajectory of U.S.-China trade has opened up to $11.5 billion, with a cumulative loss of $43.4 billion since February 2025.

Looking forward, the U.S. and China reached a one-year trade deal on 1 November 2025. We’ll see over the next several months how that deal might change the overall trajectory of the rolling twelve month average. Assuming that deal is not disrupted by President Trump’s just-announced 25% tariff on nations trading with Iran because of that nation’s repressive government’s crackdown against protestors.

All this discussion emphasizes a critical point. Rather than a tool to raise revenue, tariffs have become a tool for addressing geopolitical concerns during President Trump’s second term. They’ve become more than a means of regulating trade.

References

U.S. Census Bureau. U.S. International Trade in Goods and Services (FT900). U.S. Trade in Goods with China, Not Seasonally Adjusted, Nominal Figures, Total Census Basis. [Online database]. Accessed 8 January 2025.

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