Dear friends and colleagues:
The CFR Global Imbalances Tracker is updated.
The United States and China remain at the heart of world current-account imbalances. Despite the Trump Administration’s sweeping new tariffs last year, U.S. spending on imports and income paid to foreigners continued to grow—to a record $6.26 trillion. Tariffs on China, while reducing direct shipments to the U.S., failed to dampen the country’s manufacturing exports: these were rerouted to alternative trade partners, which in turn directed a portion on to U.S. buyers. Fueled by government subsidies, Chinese manufacturers pushed the country’s 2025 current-account surplus to a record $735 billion. The rise widened global imbalances that would otherwise have narrowed. Chinese mercantilism will, however, increasingly clash with protectionist barriers going up in the EU and elsewhere—putting a cap on continued widening.
Be sure also to check out our new CFR Global Trade Tracker, which covers nearly 200 countries over the past quarter century. Sincerely, |
