Coming up with a good metaphor to describe the state of international trade between the U.S. and China to base an editorial cartoon and headline around is challenging. Here a few of the contenders we considered for this article:
- US-China Trade Falls through the Floor in 2025 Tariff War's Second Month
- US-China Trade Plummets as 2025 Tariff War Impact Deepens
- US-China Cargo Trade Sinks as 2025 Tariff War Takes Toll
We thought the third option provided the best visual potential and went with it. But we could easily have run with any of the others, because they all work.
For example, trade between the U.S. and China did indeed fall through a floor in May 2025. Specifically, the total value of goods exchanged between the U.S. and China plunged below 2020's pandemic era low in the second month of the new tariff war between the two nations.
Trade between the U.S. and China did indeed plummet. We calculated the year-over-year growth rate for U.S. exports of goods to China and U.S. imports of goods from China and found both plunged by 40-41%. That's the second-lowest drop recorded in any month in trade between the two nations since January 1985, a period that covers the nearly entire modern era of trade between the U.S. and China when trade expanded as China's economy was restructured.
Meanwhile, May 2025 saw the total value of trade between the U.S. and China sink to its lowest level on record since the first quarter of 2009, when this measure bottomed during the so-called Great Recession.
The following chart presents the monthly figures for the combined value of goods exchanged between the U.S. and China with the trailing twelve month average and counterfactual projection of the trailing twelve month average through April 2025.
The chart also shows the growing deviation between the trailing twelve month average of the combined value of trade between the U.S. and China and our counterfactual projection of what that trajectory would look like had 2025's tariff war not happened. As expected, the shortfall between the no-2025 tariff war projection and the trailing year average grew.
The magnitude of the year-over-year decline and its impact in certain industries was such that it provided a huge incentive for the U.S. and China to strike a trade deal, which they announced and confirmed on 27 June 2025.
That event didn't occur until near the end of June 2025, so we anticipate another month in which devastating trade figures will be reported.
References
U.S. Census Bureau. U.S. International Trade in Goods and Services (FT900). U.S. Trade in Goods with China, Not Seasonally Adjusted, Nominal Figures, Total Census Basis. [Online database]. Accessed 3 July 2025.
Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of two half-full cargo container ships, one from the U.S. and the other from China, both of which have sprung leaks and are sinking".
Labels: trade
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