On the face of it, the US trade deficit has fallen to a five-year low. If you look closer though, US trade data from the second quarter of 2025 shows that tariffs are not doing much to ease the current account deficit. The deficit in goods, specifically, was only marginally lower than the average level over the past five years. In fact, despite the efforts, the United States’ trade deficit will set a new recording at the end of 2025. According to preliminary analysis it will surpass the $1.16 trillion record set in the last year of President Biden’s term and might be the first to top $1.3 trillion. On the other hand, if we look to China, we can see their trade surplus for November has widened to $111.7 billion, up a whopping 14.7% year-over-year. This goes to show that China is shrugging of this trade war (that is actually a currency war). Their trade surplus surpassed $1 trillion in the first eleven months of the year. Actual trade flow with the United States had declined. For example, shipments to the US fell 28.6% year on year in November. However, this dynamic appears to be more detrimental to the United States than to China, as China has largely offset weaker US demand through stronger export growth elsewhere. Exports to the European Union rose 14.8% year over year, shipments to Japan increased 4.3%, and exports to Southeast Asia expanded 8.2%. Read more: