When President Trump and Xi Jinping meet this month, China's massive trade surplus will dominate talks. August customs data shows China's global trade surplus hit $119.09 billion — the fourth consecutive month above $100 billion. Exports rose 25% year-over-year, pushing the 2025 surplus past $800 billion and on track to exceed last year's record $1.2 trillion. The U.S. deficit with China widened 44% to over $29 billion in August, the largest since Trump's January inauguration.

China's domestic slowdown — slowest growth in three years — has driven factories to seek overseas markets. Exports surged 26% to Southeast Asia, 25% to Africa, and 10% to Canada. AI demand boosted semiconductor exports 130% and data processing machines 77%. Strong EV demand persists as the six-month Iran war disrupts oil shipments through the Strait of Hormuz.

The EU's trade commissioner set an October deadline for Beijing to address Europe's record deficit or face harsher measures. At the G20, Treasury Secretary Scott Bessent accused China of blocking a joint statement criticizing "excessive and persistent external surpluses." Beijing denies intentional imbalances, citing innovation and efficiency. The latest data gives Trump "fresh ammunition" for talks, said Han Lin of The Asia Group.