The “made in China” sticker is losing its shine in the U.S. as Americans purchase fewer and fewer Chinese goods. China’s share of the American import market fell from 13.4% in 2024 to 9% in 2025, shrinking one side of the bilateral imbalance of trade.
When President Donald Trump eventually travels to Beijing to meet Chinese leader Xi Jinping (習近平), he will address the other side of this equation: Chinese purchases of American goods. But China’s systemic weaknesses and misaligned policy priorities will hinder big wins for U.S. companies in the Chinese market.
Soybeans were an easy early target for last year’s trade truce, which peeled back the trade barriers that had escalated in the spring, restoring some stability to the U.S.-China relationship. China committed to buying 12 million metric tons of soybeans from the U.S. in the final months of 2025 and 25 million metric tons of soybeans annually through 2028. Although China fulfilled the first commitment of 12 million metric tons, the U.S. still exported about 30% fewer soybeans to China in 2025 compared the year prior due to the fact that these exports ground to an unprecedented halt for five consecutive months. Even if China hits the 25 million metric ton target this year, this would still be a drop from pre-trade war levels in 2017.
The bigger picture of China’s economic capacity, especially for buying U.S. goods, is not as straightforward. Official growth data published by China in February claims that its GDP expanded by 5% year-on-year in 2025, exactly on target. But some experts think these numbers are skewed. The Rhodium Group estimates that China’s GDP actually grew somewhere between 2.5% and 3% in 2025 due in large part to a collapse of investment into long-term physical assets during the second half of the year, as well as weak consumer demand. “History offers no examples of economies that have recorded 5% real GDP growth while facing years of persistent deflation, as China has for ten consecutive quarters,” a report from Rhodium reads. “We doubt China is the first.”
Even if you accept China’s calculations, as experts at the Federal Reserve do, it is clear that the second largest economy is growing in spite of weak domestic consumption. “We find that the recent near-target growth has been driven by a strong supply-side performance, supported by sustained global demand for Chinese goods and industrial policies promoting self-reliance,” the Fed wrote in a memo published last year.
Ever since China’s property sector crisis in 2021, consumption has struggled to recover. Three-quarters of wealth in China was tied to real estate five years ago. Since then, $18 trillion in household wealth has evaporated, according to Barclays. S&P projects Chinese property sales to further decline 10% to 14% this year, amounting to about a 50% drop since the crisis. Other property market indicators, like prices, construction starts and completions, are also continuing to slide. Any chance of recovery is being hindered by a lack of transparency in the financial system, the Atlantic Council recently argued.
Pre-Covid retail sales, used as a proxy measure for consumption, saw 8% growth in 2019. While trade-in subsidies lifted retail sales growth in the first half of 2025 to 6.4%, this momentum faded in the second half of the year, according to Rhodium. By November 2025, retail sales growth dropped to 1.3% year-on-year. Consumer prices, confidence and labor market stress have also struggled to rebound.
China’s rapidly aging population could worsen these patterns in the coming years by putting more and more pressure on China’s younger population, usually a reliable source of consumption, to support their aging families. Government support could provide a cushion here, but China’s notoriously patchy social safety net further incentives precautionary saving.
Trends in China are also moving toward more consumption of domestically sourced goods. This is both a product of Beijing’s “dual circulation” policy, which aims to reduce reliance on foreign trade, and consumer attitudes, which increasingly favor local brands.
China’s distorted economic system will continue to rely on exports, which have expanded 40% since 2019, while imports in 2025 flatlined. As economist George Magnus put it last month in an article for the Times of London, no five-year plan will solve the paradox of China’s economy. “Breaking this impasse would require political reforms that are simply not on the agenda.”
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