Deficit with mainland hits two-decade low as trade shifts to Taiwan, Mexico and Vietnam amid tariff fallout and efforts to stabilise ties
3-MIN READ3-MIN ListenKhushboo Razdanin WashingtonandYuanyue Dangin BeijingPublished: 12:25am, 3 Apr 2026Updated: 12:30am, 3 Apr 2026Direct trade between China and the United States continues to shrink, new US government data showed on Thursday, as the anniversary of “Liberation Day” highlights how last year’s tariff escalations deepened tensions between the two global powers.The figures come ahead of a planned leaders’ meeting in Beijing next month, where both sides are expected to explore ways to stabilise relations after a period of renewed economic strain.The February international trade data by the US Census Bureau and the US Bureau of Economic Analysis, US federal agencies, showed one of the lowest monthly bilateral goods deficits with China in two decades, even as the overall US trade deficit expanded due to surging imports from alternative partners.
The US goods deficit with China stood at US$13.1 billion in February, continuing a sharp decoupling trend. This follows a landmark year in 2025, which saw a 32 per cent drop in the deficit to US$202.1 billion – the lowest level since the early 2000s.
In February, China exported US$21.0 billion worth of goods to the US, while purchasing US$7.9 billion in American products.
The data reflects years of elevated US tariffs and an aggressive “China Plus One” strategy. However, both sides are currently in high-stakes discussions to establish a “Board of Trade” – a framework aimed at a “managed trade” model where purchase commitments ensure a more balanced exchange.
