Trade balance
Updated
Summary
A trade balance is the value of a country's exports minus its imports; a surplus means it sells more abroad than it buys, a deficit the reverse. In Asymmetric Analytics content this theme means the global pattern of imbalances, centred on China's large goods surplus and the United States' large deficit, with the euro area as the third major block. China's statistics bureau reported January-September 2026 exports of 23.2 trillion yuan and imports of 16.7 trillion yuan, a gap of about 6.5 trillion yuan by AA's calculation. The US ran a goods and services deficit of USD 105.6 billion in August 2026 alone. The IMF puts China's 2025 current-account surplus at about 0.6% of world GDP and the US deficit at about 0.9%. The trade balance is the largest part of the current account, so it ties together tariffs, energy prices, exchange rates and capital flows.
Key numbers
China goods exports / imports, Jan-Sep 2026 (yuan, y/y): 23,197.9 bn (+16.4%) / 16,742.0 bn (+22.3%) (as of 2026-10-19). Source: stats.gov.cn
China goods surplus, Jan-Sep 2026 (AA calculation from NBS; no official figure in the release): about 6,455.9 bn yuan (+2.8% y/y) (as of 2026-10-19). Source: stats.gov.cn
China goods surplus, September 2026 (AA calculation from NBS): about 906.0 bn yuan (September 2025: about 645.4 bn) (as of 2026-10-19). Source: stats.gov.cn
China customs surplus change, H1 2026 (GACC): narrowed 4.7% y/y (as of 2026-07-14). Source: gov.cn
US goods and services deficit, August 2026: USD 105.6 bn (July revised 92.8 bn) (as of 2026-10-06). Source: bea.gov
US goods and services deficit, Jan-Aug 2026 vs 2025: down USD 138.2 bn (-19.9%) (as of 2026-10-06). Source: bea.gov
US goods deficit with China, Jan-Aug 2026 (NSA): USD 109.6 bn (2025 full year 202.7 bn) (as of 2026-10-06). Source: census.gov
US current-account deficit, Q2 2026: USD 246.0 bn, 3.0% of GDP (as of 2026-09-24). Source: bea.gov
China / US current-account balance, 2025 (IMF): about +0.6% / about -0.9% of world GDP (as of 2026-07-30). Source: imf.org
Euro area goods balance, August 2026 / Jan-Aug 2026: EUR -16.1 bn / EUR -5.4 bn (Jan-Aug 2025: +90.9 bn) (as of 2026-10-16). Source: ec.europa.eu
EU goods deficit with China, Q2 2026: EUR 103 bn (highest since Q3 2022) (as of 2026-06-30). Source: ec.europa.eu
US Section 301 forced-labor tariff on products of China: 12.5% (from 2026-07-24), on top of earlier 301 tariffs of 7.5-100% (as of 2026-07-24). Source: federalregister.gov
Timeline
2026-10-19 — NBS: China's Jan-Sep exports +16.4% and imports +22.3% in yuan; September trade +27.5%; domestic demand said to contribute over 70% of growth. (Source: stats.gov.cn)
2026-10-16 — Eurostat: euro area goods deficit EUR 16.1 bn in August; energy deficit EUR 26.7 bn; EU deficit with China EUR 38.4 bn. (Source: ec.europa.eu)
2026-10-06 — Census/BEA: US deficit USD 105.6 bn in August, up 12.7 bn; year to date still 19.9% below 2025. (Source: bea.gov)
2026-10-06 — EIA raises its Q4 2026 Brent forecast to USD 105/b, assuming constrained Middle East flows. (Source: eia.gov)
2026-09-28 — MOFCOM: Kuala Lumpur arrangement extended to 2027-01-10; USD 30 bn-for-30 bn reciprocal tariff cuts agreed in principle. (Source: gov.cn)
2026-09-25 — White House fact sheet on Xi's state visit: USD 30 bn each way of favourable tariff treatment; 10 Mt a year of US coal for 2027-2028. (Source: whitehouse.gov)
2026-09-24 — BEA: US current-account deficit widens to USD 246.0 bn (3.0% of GDP) in Q2 2026. (Source: bea.gov)
2026-07-30 — IMF External Sector Report: global imbalances widened in 2025, led by China's surplus (about +USD 300 bn). (Source: imf.org)
2026-07-24 — US Section 301 forced-labor tariffs take effect: 12.5% on products of China. (Source: federalregister.gov)
2026-07-14 — GACC: China's H1 2026 trade surplus narrowed 4.7% as imports grew 8.7 points faster than exports. (Source: gov.cn)
2026-02-24 — US 10% Section 122 import surcharge takes effect for 150 days. (Source: whitehouse.gov)
2026-02-20 — Supreme Court IEEPA decision; EO 14389 ends IEEPA reciprocal and China fentanyl tariffs; USTR announces Section 122 and 301 replacements. (Source: ustr.gov)
2026-01-14 — GACC: China's 2025 exports +6.1%, imports +0.5%; implied surplus about 8.51 trillion yuan (AA calculation). (Source: gov.cn)
2025-10-20 — NBS: China's Jan-Sep 2025 exports +7.1%, imports -0.2%, the base for 2026 comparisons. (Source: stats.gov.cn)
Key actors and links
China (country:china): Largest surplus economy: Jan-Sep 2026 exports 23.2 trillion yuan against imports 16.7 trillion; IMF puts its 2025 surplus at about 0.6% of world GDP.
United States (country:united-states): Largest deficit economy: USD 105.6 bn trade deficit in August 2026 and a current-account deficit of 3.0% of GDP in Q2 2026.
International Monetary Fund (actor:imf): Its 2026 External Sector Report names China and the US as the main drivers of rising excess current-account balances in 2025.
European Union (actor:european-union): Swung from a surplus to a Jan-Aug 2026 extra-EU goods deficit as energy costs rose and imports from China grew.
Trade fragmentation / tariffs (theme:trade-fragmentation): Tariffs (Section 122, 301, 232) reroute bilateral flows; the IMF finds little historical effect on aggregate balances.
Current account (theme:current-account): Trade in goods is the largest component of the current account for China, the US and the EU.
Balance of payments (theme:balance-of-payments): A trade surplus must be matched by net capital outflows or reserve accumulation; a deficit by net inflows.
GDP growth (theme:gdp-growth): Net exports are one expenditure component of GDP; NBS says domestic demand provided over 70% of China's growth in Jan-Sep 2026.
2026 Iran war (event:2026-iran-war): Higher oil and gas prices raised energy import bills, widening the euro area energy deficit to EUR 26.7 bn in August 2026.
Crude oil (commodity:crude-oil): Brent forecast by EIA at USD 105/b in Q4 2026; oil prices shift balances between importers and exporters.
Chinese renminbi (asset:cny): Persistent Chinese surpluses keep pressure on the renminbi's level and on partners' currency complaints.
US dollar (asset:usd): The US deficit is financed by foreign purchases of dollar assets; the net investment position was -USD 22.42 trillion at end-Q2 2026.
People’s Bank of China (actor:peoples-bank-of-china): Sets the daily renminbi fixing, a channel through which the surplus does or does not feed through to the exchange rate.
Vietnam (country:vietnam): Second-largest US bilateral goods deficit in August 2026 (USD 24.0 bn), consistent with rerouted supply chains.
Mexico (country:mexico): Largest US bilateral goods deficit in August 2026 (USD 27.7 bn).
Why it matters now
Four forces are moving balances in 2026. First, tariffs: after the Supreme Court ruled on the IEEPA tariffs on 2026-02-20, the US replaced them with a 150-day 10% Section 122 surcharge and, from 2026-07-24, Section 301 forced-labor tariffs of 12.5% on Chinese goods, on top of older Section 301 duties. Tariffs have reshaped bilateral flows (the US goods deficit with China fell from USD 297.0 bn in 2024 to 202.7 bn in 2025, while in August 2026 Mexico, Vietnam and Taiwan topped the US bilateral deficit list), but the IMF finds no clear historical effect on aggregate balances. Second, energy: the 2026 Iran war lifted oil prices (EIA forecasts Brent at USD 105/b in Q4 2026), so the euro area's energy deficit widened and it swung from a EUR 90.9 bn Jan-Aug 2025 surplus to a EUR 5.4 bn deficit. Third, domestic demand: the IMF ties China's surplus to weak investment and high saving and the US deficit to low saving and a large fiscal deficit. China's retail sales grew 1.1% in Jan-Sep 2026 while its imports rose 22.3% in yuan; NBS publishes no import price index in its release, so how much of that import growth is price (including energy) rather than volume is UNKNOWN. Fourth, currency: a surplus that is not offset by a stronger renminbi has to be recycled as capital outflows or reserves.
The signals conflict. GACC said China's H1 surplus narrowed 4.7%, and the US Jan-Aug deficit was 19.9% below 2025 (AA reads part of that as a base effect from early-2025 import front-loading ahead of tariffs, an inference not stated by Census). But by AA's calculation from NBS data China's September surplus was about 40% above a year earlier, and the US monthly deficit with China rose from USD 9.8 bn in March to 18.4 bn in August. Whether 2026 is a year of rebalancing or renewed widening is therefore open, and the answer matters for the 2027-01-10 US-China truce deadline and for EU trade policy.
Risks and open questions
Bull case: Rebalancing is under way in parts of the data. China's customs office said its H1 2026 surplus narrowed 4.7% as imports grew faster than exports, and import growth stayed above 20% in every quarter. The US deficit for January-August 2026 was 19.9% below 2025, and the US-China bilateral goods deficit fell from USD 297.0 bn in 2024 to 202.7 bn in 2025. The September US-China consultations extended the truce to 2027-01-10 and agreed reciprocal tariff cuts on USD 30 bn each way, which lowers the risk of a new tariff spiral. If oil prices fall as EIA forecasts for 2027 (USD 84/b), energy importers' deficits should narrow.
Bear case: The surplus is widening again at the margin. AA's calculation from NBS data puts China's September surplus about 40% above September 2025, the US monthly deficit with China doubled between March and August 2026, and the US total deficit jumped to USD 105.6 bn in August. The IMF says China's 2025 surplus widening was the largest since at least 2000 and that it reflects weak investment and high saving, which tariffs do not fix. The EU's deficit with China reached EUR 103 bn in Q2 2026, the highest since 2022, while the energy shock pushed the euro area into deficit. Inference (AA): this combination raises the risk of new EU trade defence measures and renewed US pressure as the 2027-01-10 truce deadline approaches.
Falsifiers: - Bull case fails if China's Q4 2026 customs surplus (yuan) is well above Q4 2025 and the US monthly goods deficit with China stays above USD 15 bn. - Bull case fails if the 2027-01-10 Kuala Lumpur deadline passes without extension or the 30-for-30 tariff cuts never take effect. - Bear case fails if China's import growth keeps outpacing exports in Q4 2026 so that the full-year 2026 surplus (yuan) is at or below 2025's implied 8.51 trillion. - Bear case fails if the euro area returns to a monthly goods surplus while Brent stays above USD 95/b, showing the deficit is not only an energy effect. - The IMF saving-investment diagnosis is weakened if China's balance narrows mainly because tariffs cut exports while domestic investment keeps falling.
What to watch
US international trade release for September 2026 (Census/BEA) (2026-11-04); Source: bea.gov
China customs (GACC) October 2026 trade data: does the surplus keep widening? (early November 2026 (date not verified)); speculative, no scheduled source
Eurostat euro area trade for September 2026: does the energy-driven deficit persist? (mid-November 2026 (date not verified)); speculative, no scheduled source
Next EIA Short-Term Energy Outlook, updating the oil price path that drives energy import bills (2026-11-10); Source: eia.gov
Entry into force of the US-China 30-for-30 reciprocal tariff cuts after domestic procedures (no scheduled date); Source: mofcom.gov.cn
Expiry of the extended Kuala Lumpur US-China arrangement unless extended again (2027-01-10); Source: gov.cn
NBS full-year 2026 data showing whether net exports' contribution to growth is reported (no scheduled date); speculative, no scheduled source
AA inference
Inference (AA): the trade balance is the graph's accounting bridge between real-economy shocks and financial and political outcomes. Tariff and energy shocks change who buys and sells, but the size of the global imbalance is set mostly by saving and investment at home, which is why AA treats bilateral deficits as a political signal and aggregate balances as the macro signal. A widening Chinese surplus with weak domestic demand is the configuration most likely to trigger partner trade defence and currency pressure; an energy-driven deficit in Europe is more likely to fade with oil prices. AA should read monthly bilateral numbers with caution: they are noisy, front-loaded around tariff deadlines, and reported in different currencies and bases (customs yuan, Census dollars, balance-of-payments).
Sources
NBS (2026-10-19): January-September 2026 goods trade was 39,939.9 billion yuan, up 18.8% y/y; exports 23,197.9 billion yuan (+16.4%) and imports 16,742.0 billion yuan (+22.3%), in current-price yuan. (Source: stats.gov.cn, accessed 2026-10-20)
NBS (2026-10-19): September 2026 goods trade was 5,162.8 billion yuan (+27.5% y/y); exports 3,034.4 billion yuan (+29.6%) and imports 2,128.4 billion yuan (+24.6%). The release states no trade-surplus figure. (Source: stats.gov.cn, accessed 2026-10-20)
NBS (2025-10-20): January-September 2025 exports were 19,945.0 billion yuan (+7.1%) and imports 13,662.9 billion yuan (-0.2%); September 2025 exports 2,344.5 billion yuan and imports 1,699.1 billion yuan. AA calculation from the two NBS releases: the January-September goods surplus was about 6,455.9 billion yuan in 2026 versus 6,282.1 billion in 2025 (+2.8%), and the September surplus about 906.0 versus 645.4 billion yuan (+40%). (Source: stats.gov.cn, accessed 2026-10-20)
NBS deputy commissioner Q&A (2026-10-19): domestic demand contributed more than 70% of GDP growth in the first three quarters and final consumption expenditure contributed 46.7%; exports grew by double digits and imports by more than 20%, with import growth above 20% in every quarter of 2026; he said balanced trade development had achieved positive results. No net-export contribution figure was given. (Source: stats.gov.cn, accessed 2026-10-20)
GACC at the SCIO briefing (2026-07-14): H1 2026 goods trade 25.47 trillion yuan (+16.9%), exports 14.73 trillion (+13.4%), imports 10.74 trillion (+22.1%); spokesperson Lü Daliang said the trade surplus narrowed 4.7% and that imports grew 8.7 percentage points faster than exports. (Source: gov.cn, accessed 2026-10-20)
GACC (2026-07-14): H1 2026 trade with the US was about 2 trillion yuan, 7.9% of China's total, after falling 18.7% y/y in Q1 and rising 13.7% in Q2; trade with ASEAN was 4.34 trillion yuan (+18.2%) and with the EU rose 10.2%. (Source: gov.cn, accessed 2026-10-20)
GACC at the SCIO briefing (2026-01-14): 2025 goods trade was 45.47 trillion yuan (+3.8%), exports 26.99 trillion (+6.1%) and imports 18.48 trillion (+0.5%); trade with the US was 4.01 trillion yuan (8.8% of the total) and with the EU 5.93 trillion (+6%). The briefing gave no surplus figure; AA calculation: about 8.51 trillion yuan. (Source: gov.cn, accessed 2026-10-20)
Census/BEA (released 2026-10-06): the US goods and services deficit was USD 105.6 billion in August 2026, up USD 12.7 billion from a revised USD 92.8 billion in July; exports USD 315.2 billion, imports USD 420.8 billion, goods deficit USD 136.6 billion, services surplus USD 31.0 billion. (Source: bea.gov, accessed 2026-10-20)
Census/BEA: year to date through August 2026 the US goods and services deficit fell USD 138.2 billion (19.9%) from the same period of 2025; exports rose 11.8% and imports 4.4%. (Source: bea.gov, accessed 2026-10-20)
Census/BEA: largest US bilateral goods deficits in August 2026 (Census basis, seasonally adjusted): Mexico USD 27.7 billion, Vietnam 24.0, Taiwan 18.3, China 16.4, EU 11.0, South Korea 9.4, Canada 7.1. (Source: bea.gov, accessed 2026-10-20)
Census/BEA: the September 2026 trade release is scheduled for 2026-11-04; the August release mentions no data delay. (Source: bea.gov, accessed 2026-10-20)
Census/BEA August 2026 detail: capital goods imports rose USD 6.2 billion (semiconductors +2.4 billion) and crude oil imports rose USD 3.3 billion, while crude oil exports rose USD 2.0 billion. (Source: bea.gov, accessed 2026-10-20)
Census: US goods trade with China, not seasonally adjusted, showed a deficit of USD 109.6 billion in January-August 2026 (exports 73.9 billion, imports 183.5 billion); the monthly deficit rose from USD 9.8 billion in March to 18.4 billion in August. Full-year deficits were USD 202.7 billion in 2025 and 297.0 billion in 2024. (Source: census.gov, accessed 2026-10-20)
BEA (2026-09-24): the US current-account deficit widened by USD 33.4 billion to USD 246.0 billion (3.0% of GDP) in Q2 2026, from a revised 212.6 billion (2.7%) in Q1; the net international investment position was -USD 22.42 trillion at end-Q2. (Source: bea.gov, accessed 2026-10-20)
IMF blog on the 2026 External Sector Report (2026-07-30): global current-account balances widened again in 2025; China's surplus rose by about USD 300 billion, the largest widening in absolute terms since at least 2000, to about 0.6% of world GDP; the US deficit narrowed by USD 69 billion but at about 0.9% of world GDP remains the largest. (Source: imf.org, accessed 2026-10-20)
IMF ESR 2026: excess current-account balances increased in 2025 with China and the United States as the main drivers; persistent large excess balances can raise the risk of disorderly adjustment. (Source: imf.org, accessed 2026-10-20)
IMF ESR 2026: China's surplus reflects weakening investment (real estate first, then manufacturing and infrastructure) and high private saving; the US deficit reflects low saving and a large fiscal deficit; historically trade barriers have had no clear effect on aggregate current accounts, though they have reshaped bilateral patterns, with US imports from China falling sharply. (Source: imf.org, accessed 2026-10-20)
IMF ESR 2026: the average applied effective US tariff rate remains around 7-8.5% after the IEEPA ruling and the 10% surcharge; early 2026 data show a further large rise in China's trade balance; the Middle East war and energy price spike likely bring a short-lived 2026 rise in oil exporters' surpluses. (Source: imf.org, accessed 2026-10-20)
USTR statement (2026-02-20): the Supreme Court decision addressed only the IEEPA reciprocal and fentanyl tariffs; USTR said the US would immediately impose a temporary 10% surcharge under Section 122, open new Section 301 investigations, and keep Section 301 tariffs on China (7.5% to 100%) and Section 232 tariffs (10% to 50%). (Source: ustr.gov, accessed 2026-10-20)
Executive Order 14389 (2026-02-20) ended the IEEPA duties under nine orders, including EO 14195 (China synthetic opioids) and EO 14257 (reciprocal tariffs), which 'shall no longer be in effect'; Section 232 and Section 301 duties are unaffected. (Source: whitehouse.gov, accessed 2026-10-20)
White House fact sheet (2026-02-20): a 10% ad valorem import surcharge for 150 days from 2026-02-24, citing 'fundamental international payments problems', exempting energy and energy products, certain critical minerals, pharmaceuticals, Section 232 goods and USMCA-compliant goods; it cites a 2024 US current-account deficit of 4.0% of GDP. (Source: whitehouse.gov, accessed 2026-10-20)
Federal Register 2026-15181: USTR's forced-labor Section 301 action imposes a 12.5% tariff on products of China (annex exemptions apply) for goods entered on or after 12:01 a.m. Eastern Time on 2026-07-24; the EU and Taiwan face 10% net of MFN duty and Japan, South Korea and Switzerland 12.5% net of MFN duty. (Source: federalregister.gov, accessed 2026-10-20)
MOFCOM Americas department readout (gov.cn, 2026-09-28): the eighth round of US-China consultations (2026-09-20 to 09-23) extended the Kuala Lumpur arrangement from 2026-11-10 to 2027-01-10 and agreed reciprocal tariff cuts on about USD 30 billion of each other's goods, about 90% to MFN rates, after domestic procedures. (Source: gov.cn, accessed 2026-10-20)
MOFCOM (2026-09-28): the US-China Board of Trade's task is to 'optimize bilateral trade'; the '30 for 30' framework is benchmarked to 2024 trade, with US cuts on Chinese toys, appliances and household goods and Chinese cuts on US farm goods, medical devices and coal; no effective date was set. (Source: mofcom.gov.cn, accessed 2026-10-20)
White House fact sheet (2026-09-25) on Xi Jinping's state visit: consensus on more favourable tariff treatment for USD 30 billion of non-sensitive goods in each direction, and Chinese imports of at least 10 million tonnes of US coal in each of 2027 and 2028; it makes no statement on the deficit. (Source: whitehouse.gov, accessed 2026-10-20)
Eurostat (2026-10-16): the euro area recorded a goods trade deficit of EUR 16.1 billion in August 2026 (August 2025: deficit EUR 1.7 billion); its energy deficit widened from EUR 21.3 billion to 26.7 billion; January-August 2026 showed a deficit of EUR 5.4 billion against a surplus of EUR 90.9 billion a year earlier. (Source: ec.europa.eu, accessed 2026-10-20)
Eurostat (2026-10-16): in August 2026 EU imports from China rose 19.7% to EUR 53.1 billion and exports to China 3.2% to EUR 14.7 billion, a bilateral deficit of EUR 38.4 billion (EUR 30.1 billion a year earlier); the EU ran a EUR 8.6 billion surplus with the US. (Source: ec.europa.eu, accessed 2026-10-20)
Eurostat Statistics Explained: the EU goods deficit with China was EUR 103 billion in Q2 2026, the highest since Q3 2022, with imports from China at EUR 154 billion. (Source: ec.europa.eu, accessed 2026-10-20)
Eurostat: the EU current-account surplus fell to EUR 80.2 billion (1.6% of GDP) in Q2 2026 from 91.7 billion (2.0%) a year earlier; the bilateral current-account deficit with China widened to EUR 66.6 billion from 49.7 billion. (Source: ec.europa.eu, accessed 2026-10-20)
EIA Short-Term Energy Outlook (2026-10-06): Brent is forecast to average USD 105/b in Q4 2026, USD 96/b in 2026 and USD 84/b in 2027; EIA assumes Middle East oil flows stay constrained through Q4 2026. (Source: eia.gov, accessed 2026-10-20)