YIKES
China just posted a record-breaking $1.2 trillion global trade surplus. The EU's is up 18.1%. Germany's numbers are BONKERS - a staggering 108% surge in surplus, meaning that it now accounts for nearly a third of China's entire EU surplus.
The US has been aggressively correcting its own trade imbalance with China through tariffs and restrictions. The result? China's exports to the US plummeted 20% in 2025, with imports from the US down 14.6%.
Those diverted goods are flooding into Europe, especially Germany. Beijing is redirecting its export machine to softer targets, exploiting the EU's open markets while building dependencies in critical sectors like EVs, batteries, and solar panels. Germany, with its auto giants like Volkswagen and BMW deeply entangled in the Chinese market, is particularly vulnerable.
China's mechanism is through excess production capacity. It identifies a key industry, builds the capacity to produce 90% of global demand, and then flood markets with subsidized exports priced at marginal cost, backed by a 20% undervalued currency.
Domestic markets are decimated. Germany is de-industrialized.
Germany can either admit "Trump was right" or continue getting teabagged by the Chinese.
Full 2025 Chinese trade data now out. Headline is clearly a historical global record $1.2 trillion surplus with the world
What of Europe?
📈China's trade surplus with the EU: 18.1%
📈 with Germany: 108%
📈 with France: 23.9%
📈 with Italy: 32.6%
📈 with Netherlands: 1.4%