Trade war: Chinese imports fall to their lowest level

The trade war between the United States and China is unraveling bilateral trade at an unprecedented speed: in 2025, China’s share of total US goods imports fell to 9%, the lowest level since the 1990s, according to the Peterson Institute for International Economics (PIIE).

The tariff escalation

Donald Trump launched his second trade war shortly after taking office in January, and by April had raised tariffs on China by 145 percentage points. The result was immediate: real US imports from China fell 28% in 2025. Before the first trade war, in 2018, China supplied 22% of US imports.

Beijing’s response

President Xi Jinping responded by restricting Chinese exports. Twice during 2025, China came close to halting the US auto industry by cutting access to essential inputs, such as rare earth magnets and certain semiconductors, components on which automakers around the world depend. About 6.5% of US manufacturing workers are employed in just-in-time automotive supply chains.

Supply chain relocation

While trade with China unravels, real US imports from the rest of the world grew 9% in 2025: supply chains are moving toward Vietnam, Taiwan and Mexico. Even so, for a group of harder-to-replace products, such as rare earth magnets and semiconductors, the chains have not yet left China.

The practical takeaway

The truce allowed part of the trade to resume, but the direction is clear: trade between the world’s two largest economies is separating faster than ever. For small economies like the Dominican one, the shift matters doubly: it makes inputs and export opportunities more expensive, and it redefines which trading partners are worth looking at.