Why China is in no rush to seek a U.S. trade deal

Yahoo

07-05-2025

Containers stacked up early last month at the Phnom Penh Autonomous Port in Phnom Penh, Cambodia. Chinese customs data show increasing exports to Vietnam and Thailand, both of which border Cambodia. - suy se/Agence France-Presse/Getty Images
Thirty-four days into the opening salvo of global trade-war hostilities and the U.S. has yet to sign any of the 90 deals in 90 days it promised. One possible explanation of the glacial pace at which negotiations with China are proceeding — if they are proceeding at all — is China's confidence that it can find other export markets, alongside its apparent ability to get around trade barriers.
Chinese customs data, highlighted Monday by Robin Brooks of the Brookings Institution, revealed a significant acceleration of Chinese exports to Vietnam and Thailand that most analysts would posit are in actuality transshipments to the U.S. Since the start of the year, both countries' imports from China are more than 50% higher.
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If China can still ship — albeit indirectly, in the process incurring higher costs — to the U.S., then its lethargy in sending a negotiating team to Washington is understandable.
The S&P 500 SPX has bounced back from early April lows on hopes that deals will be struck to lighten tariffs from countries, most notably China, where even President Donald Trump says levies are too high to allow for trade.
Interviewed by CNBC Monday, Treasury Secretary Scott Bessent was visibly discomfited when questioned directly about whether talks with China were taking place at all. Bessent's argument was that, in any trade dispute, it is the country with the surplus that has the most to lose from what he described as the 'equivalent of an embargo.' The chart above suggests the current status of Sino-American commerce falls short of that.
It is worth noting also that three years of punitive trade restrictions imposed on Russia, largely mapped out by America, have failed to cripple Russia's export capacity as designed. Relatively speaking, China has greater maneuverability, and it may be able to exploit the now-fraught relations between Washington and the rest of the world to its benefit.
To that end, the chart above demonstrates that China has effected a similar uplift in exports to the U.K. and Brazil this spring.
Given the spike in Asian foreign-exchange volatility over the last few trading sessions, it's worth noting that the greatest beneficiaries of dollar strength are Asian exporters. No one needs a strong dollar more than China if it is to remain the world's factory, and Asia is rapidly reassessing its mercantilist policies.