U.S. consumers have benefited from lower prices, many favor more cooperation with China, according to a CFR-Morning Consult poll conducted in January 2026. U.S. companies have also profited immensely from access to China’s market. In a 2019 study, economists Xavier Jaravel and Erick Sager found that increased trade with China boosted the annual purchasing power of the average U.S. household by $1,500 between 2000 and 2007. For China, gains from trade with the United States and the rest of the world have been tremendous. Since 2001, China’s economy has grown more than five-fold, adjusted for inflation, and it is now the world’s second largest, behind the United States. (By some measures, it is the largest.) Hundreds of millions of people have escaped extreme poverty as a result of this growth.

To achieve these goals, the Chinese government poured subsidies into a range of industries, with the aim of creating “national champion” companies. Some experts argue that these subsidies are wasteful and anticompetitive as they disrupt other countries whose companies cannot compete against such levels of state support. Moreover, many economists say that China artificially devalued its currency, the renminbi, in the decade after joining the WTO by accumulating U.S. dollar reserves. A weaker renminbi makes Chinese products more affordable abroad and U.S. goods more expensive in China, thereby contributing to the United States’ trade deficit with China.

The George W. Bush administration, responding to calls from U.S. companies for better protections, imposed tariffs on a range of Chinese goods that were subsidized or “dumped” (i.e., sold below market value). It also launched high-level dialogues with China to address other ongoing trade issues.

These dialogues continued under President Barack Obama, whose administration used a special safeguard to impose tariffs on imported tires. Scrutiny of Chinese investment increased, with Obama taking the rare step of blocking two Chinese acquisitions on national security grounds. The administration also won several WTO disputes against China and concluded negotiations for the Trans-Pacific Partnership (TPP), a mega-regional trade agreement that Obama billed as a way to contain China on trade and shore up economic integration with other trading partners in the region. Trump withdrew the United States from the TPP in 2017 after taking office, but the agreement continues to exist as the Comprehensive and Progressive Agreement for Trans Pacific Partnership and has expanded to include several additional countries.

China’s biggest exports

Electronics, machinery, and textiles rank among top Chinese exports to the United States. China is also the world’s top supplier of electronics and machinery components, including smartphones, computers, and key components needed to produce these products. Continued global growing demand for electronics and items such as textiles from China has put the country on track to overtake its record $1.2 trillion trade surplus last year.

Meanwhile, China imports machinery and mineral, chemical, and vegetable products from the United States, though in much lesser numbers. Examples of items imported by China include oilseed and grains; oil and gas products; pharmaceuticals; and more. In 2024, China spent respectively $13.5 billion and $12.5 billion on petroleum and soybeans, its top two export products. Integrated circuits have also risen in the ranks of China’s U.S. exports, with China spending $9.96 billion on them in 2025.

Technology’s role

Technological competition is a core feature of U.S.-China trade relations. The United States has characterized various Chinese technologies—including the formerly Chinese-owned social media app TikTok and Chinese telecommunications company Huawei—as national security threats. China, for its part, has perfected the model of obtaining Western technology, Jennifer Hillman, senior fellow for trade and international political economy, told CFR. Beijing uses the technology to develop domestic companies into giants, then unleashes them into the world market—at which point foreign companies can no longer compete. Over the past decade, Washington and Beijing have been battling along several technological fronts, including:

AI leadership: With AI increasingly deployed in defense, intelligence, and economic contexts, both countries have sought to solidify their supremacy on this frontier technology. Although U.S.-made AI models outperform their Chinese competitors, China has focused on scaling the use of AI applications in manufacturing and daily life, wrote CFR President Michael Froman. Beijing achieved a major technological milestone with Chinese startup DeepSeek launching one of the world’s most advanced AI models in January 2025. It reportedly operates at cheaper costs and higher energy efficiency that rivals the capacity of the U.S. AI titans, such as OpenAI and Google DeepMind.

Taiwan and semiconductors chips: In an effort to restrict China’s technologic access, the United States began implementing export controls on advanced semiconductor chips—an essential component for most technologies, including smartphones, computers, weapons systems, and AI infrastructure—in 2018. This also included export controls on technologies that were seen as having a “dual-use” capacity for commercial and military purposes. The second Trump administration, however, seemed to reverse course by approving the sale of U.S. company Nvidia’s advanced H20 chips to China in August 2025. The agreement has come under sharp scrutiny by U.S. officials.

Meanwhile, Taiwan, which produces 90% of the world’s chips, is a critical part of the U.S.-China economic relationship. Taiwan Semiconductor Manufacturing Company (TSMC) is the top supplier for U.S. companies, such as Apple, and it has invested in manufacturing facilities in the United States. Despite the United States accounting for a third of Taiwan’s total exports, the island’s economy also relies on trade with China; in 2025, China and Hong Kong made up 26.6% of Taiwan’s total exports.

TikTok and national security: The social media app TikTok, created by Chinese company ByteDance, had been a major target by U.S. lawmakers seeking to restrict Chinese access to Americans’ data. After Trump floated the idea of banning TikTok in his first term, Biden signed into legislation that ByteDance would be required to sell the social media app to a U.S. owner or face a ban. TikTok sued the U.S. government, but the Supreme Court ultimately upheld the ban. In January, ByteDance agreed to divest almost 80% of TikTok’s assets, valued at $14 billion, to an U.S.-owned joint venture that included global conglomerates Oracle, Silver Lake, and MGX. (ByteDance still owns the remaining 19.9% stake in the company.) Efforts to ban TikTok have fueled larger conversations about what U.S. policymakers have characterized as Chinese efforts to spread disinformation and collect sensitive information on Americans.

IP Theft: Firms have long accused Chinese companies of stealing intellectual property to develop counterfeit products, pirated software, access trade secrets, and forced technology transfer on condition of doing business in China. The research organization Intelligence and National Security Alliance found in a May 2021 report that Chinese IP theft costs between $300 and $600 billion annually. Although China’s IP laws have improved over the past decade, theft is still prevalent, even among Chinese firms that have appropriated capabilities domestically.

Critical minerals?

China produces 60% of the world’s rare earths and processes almost 90% of rare earth magnets, dominating the supply of the minerals crucial to manufacturing automobiles, semiconductors, and military weapons worldwide. Experts say having control of this critical sector of the global supply chain helps China bolster domestic manufacturing and regulate which entities are permitted to access its supply.

While China has had export controls in place since 1994, the government modernized its policies in 2020, creating a unified framework for managing sales of dual-use technology, military goods, and “national security” interest technology. Its recent controls on rare earths announced in October 2025 included expanding the license requirements for various rare earths and controlling the trade of rare earth magnets produced outside China.

Analysts say China’s so-called rare earth chokehold, which made it able to entirely cut off the United States and Europe from several critical minerals, makes the rest of the world more vulnerable to geopolitical tensions between the United States and China. The International Energy Agency argues that China’s export controls could “significantly undermine international efforts to diversify rare earth supply chains and scale up strategic manufacturing.”

As the United States and its European allies slowly back away from climate efforts, China has heavily invested in clean, renewable energy, making it a leading figure in energy investments. China’s domestic solar power-generation capacity quadrupled between 2021 to 2025, while petroleum remains the largest primary source of energy consumption in the United States.

China also became the world’s largest auto exporter for conventional vehicles and electric vehicles (EV) in 2025, producing some of the cheapest and most efficient EVs on the market. The United States and Europe have imposed tariffs on Chinese EV imports to protect their own domestic EV industries. In 2024, the Biden administration implemented a 100% tariff on Chinese EVs, effectively blocking Chinese companies from entering U.S. markets, and a 25% tariff on EV lithium batteries. Meanwhile, Trump has issued tariffs on Chinese graphite—an important component in making lithium batteries.