China’s Export Surge Strengthens Xi’s Hand as Trump Raises Trade War Stakes
China’s export growth has surged, giving the country a strong advantage in its trade dispute with the United States, according to global financial advisory firm deVere Group.
In September, China’s exports increased by 8.3% compared to the same time last year, surpassing expectations and exceeding August’s growth. Additionally, imports rose by 7.4%, indicating that China’s industrial sector remains strong despite efforts by the US to apply pressure through tariffs and technology restrictions.
This increase in exports comes as US Treasury Secretary Scott Bessent suggests that the current three-month pause on import duties may be extended, but only if China abandons its plan to impose strict new export controls on rare-earth elements. These materials are essential for global manufacturing, from electric vehicles to advanced chips and weapons systems.
Nigel Green, CEO of deVere Group, states, “Scott Bessent is attempting to use tariff relief as leverage, but China’s export rebound shows that the pressure is flowing both ways.”
Green continues, “Xi Jinping now has evidence that China’s trade engine is resilient and that his government can handle external shocks, while the US is still struggling to find leverage in the negotiations.”
The trade standoff has escalated since Beijing announced broad export licenses for rare-earth and magnet technologies, effectively tightening its control over supply chains that the West cannot yet replace. In response, the US has threatened 100% tariffs, imposed new restrictions on Chinese software, and discussed coordinated efforts with allies through the G7 to deter further Chinese restrictions.
Green notes, “The trade war has developed into a power struggle over who controls the materials and technologies that drive the modern economy.”
“China’s message is that it can dictate the pace of global production. Washington’s message is that it is willing to endure economic pain to prevent that dominance. Neither side appears ready to back down.”
Despite the standoff, China’s export growth is being driven by markets far beyond the US. Shipments to the European Union, Southeast Asia, Africa, and Latin America are all increasing at double-digit rates, demonstrating China’s success in diversifying its trade routes.
Green remarks, “Beijing’s ability to expand into new markets while withstanding US tariffs is one of the defining shifts of the decade. It demonstrates how global manufacturing still relies on China’s capacity, logistics, and pricing power. Even during a period of confrontation, the rest of the world cannot easily step away.”
This tension is already being felt in the markets. Currency volatility has increased, commodity prices have risen, and equity investors are adjusting their exposure to sectors tied to global manufacturing.
Green states, “The next phase of this trade battle will shape monetary policy and investor sentiment worldwide. If tariffs rise and supply chains break, inflationary pressures could return just as central banks are preparing to ease policy. This combination could create both disruption and opportunity across portfolios.”
He adds, “Periods of geopolitical stress frequently result in outsized gains for those who position themselves ahead of the cycle. Countries and companies able to fill the production gaps left by restricted trade will emerge as major winners. Investors who maintain diversified exposure across regions and asset classes will be best positioned to benefit.”
For now, Beijing appears to be emboldened. The export data supports its claim that China can withstand any escalation of tariffs and maintain global demand. Meanwhile, the US faces the dilemma of further tightening without triggering inflation or alienating allies who rely on Chinese supply chains.
Green concludes, “The numbers out of Beijing change the tone of the talks. China goes into the next round stronger, not weaker.”
“The US may have the world’s largest consumer market, but China is proving that it still controls the world’s factory floor.”
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