Shocking Downfall: China Slips to Third in U.S. Trade Rankings

The landscape of U.S trade relations is dramatically shifting. With China once ruling the roost of U.S trade partners, it has now slipped to a distant third place, its standing closer to other global nations than to Mexico or Canada. As of May, China comprised 5.89% of total U.S. trade, marking the lowest monthly figure in over 23 years.

The cause for such a seismic shift is debated, with possible explanations including the influence of President Trump’s tariffs or perceived manipulations of ‘origin of origin’ labeling. However, the undeniable truth is that this is an extraordinary transformation in international commerce.

Several years previous, shortly after President Trump secured his initial term in office, China represented a whopping 17.77% of all U.S. trade. This was thrice the present configuration. Within months of being installed to the White House, Trump triggered a trade conflict which would not only endure through the Biden administration but would also escalate under his oversight.

The ripple effects of this commercial confrontation have significantly reshaped the U.S. import-export map. It appears one of the primary goals driving Trump’s decisions – reducing the U.S. goods trade deficit – has not only misfired but has dramatically backfired.

Against expectations, in six out of the last eight years, the U.S. deficit has swelled, exceeding $1 trillion in the recent four. Rather than experiencing a decrease, the deficit has simply reallocated. By the close of 2018, the U.S. trade deficit with China was quintuple than that of any other nation.

In stark contrast to previous trends, today, it is marginally larger than that with Mexico and for the first time in many years is less than the combined deficits with Mexico and Canada. Analyses reveal a stunning 29.37% decrease in the U.S. deficit with China, while deficits with other major trade partners have soared: Mexico by 121.08%, Canada by 240.67%, South Korea by 268.33%, Taiwan by 385.39%, and Vietnam by as much as 212.85%.

It’s popularly presumed that China had been manipulating the system to alter the ‘country of origin’ labeling and evade high U.S. tariffs, with particular focus on Vietnam. Questions persist in understanding this complex trade rearrangement especially when the U.S. experiences a trade surplus with over 100 countries.

An unintended fallout of the ongoing trade standoff is that it has strained relations with U.S. allies causing discomfort and tension. Another unintentional outcome is a marked improvement in one key trade metric notwithstanding the rising deficit – the proportion of U.S. trade versus imports. Historically, this balance has taking a steep dive even as the deficit kept growing.

In the current scenario, China has fallen to the third spot amongst U.S. trade partners, lagging considerably behind Mexico and Canada, which hold the first two positions, respectively. The gap between the top two and China is so wide that China’s percentage share is closer to the rest of the world’s nations.

When Trump inaugurated his first term, China was a major player in U.S. imports, consistently contributing more than 20% to the total import volume. However, since 2018, China hasn’t been able to sustain that performance. Instead, Mexico and Canada have now overtaken China.

Upon comparing the initial five months of 2025 to the corresponding duration of 2018, it’s evident that U.S. imports from China have dropped by 27.55%, while overall U.S. imports from the world grew by 47.29%. This downward trajectory is also visible in U.S. exports.

The change in China’s share of U.S. trade between Trump’s first term and the early part of his second is dramatic and significant. The effect? Despite all these shifts, the U.S. deficit continues to ascend.