China’s economy has continued to grow even after the U.S. imposed massive tariffs, mainly because Beijing and Chinese firms adjusted structurally instead of relying on the old export model.
First, China diversified its export markets. While exports to the U.S. fell by about 28–29%, exports to other regions increased, with shipments to ASEAN countries rising by around 8% and to the EU by about 14–15%. This shift in market composition helped offset the decline in U.S.-bound exports.
Second, China changed the composition of its exports. Traditional labor‑intensive goods such as toys, footwear, and furniture declined, especially to the U.S., but higher-value products expanded to the world. Exports of ships grew by about 26–27%, semiconductors and related products by around 25%, automobiles by roughly 16–17%, and general high-tech goods by about 6–7%. This indicates a move up the value chain toward more advanced and capital‑intensive industries.
Third, the government adopted strong domestic policy measures to cushion the impact of tariffs. These included stimulus policies, credit easing, and industrial support aimed at key sectors such as high-tech manufacturing, autos, and other strategic industries. At the same time, China put more emphasis on boosting domestic consumption, so that internal demand could partially replace lost external demand.
Thanks to this combination of market diversification, product upgrading, and active domestic policy, China was able to maintain growth of around 5.4% (by 2025) and achieve a trade surplus of about US$ 1 trillion for the first time, despite a sharp fall in exports to the U.S.
Vietnam is also a good example of how a country can successfully diversify its export basket. It has reduced its dependence on basic apparel by moving into higher value‑added garments and expanding exports in sectors like electronics and machinery. For Bangladesh, which is still heavily reliant on apparel and the US market, diversifying both export products and destinations has now become critical to reduce risk and ensure sustainable growth.
Author –
Mohiuddin Rubel
Former director, BGMEA
