Here's something that should probably worry trade hawks: Despite President Donald Trump throwing tariffs at China like confetti—including rates that hit 245% at certain points—the country's export machine is doing just fine, thank you very much.

The Tariff Strategy That Didn't Work

On Monday, International Monetary Fund First Deputy Managing Director Gita Gopinath took to X to highlight what she called one of the year's most striking developments. China has successfully compensated for its shrinking U.S. market share by simply selling more stuff to other countries. Who knew trade was so flexible?

The numbers tell the story. According to China's General Administration of Customs, exports jumped 5.4% year-over-year to $3.4 trillion during the first 11 months of this year, generating a whopping $1.08 trillion trade surplus. That's during a year defined by escalating tensions with America, China's biggest trading partner.

Gopinath observed that China's growth has held steady at 5% this year, apparently "unaffected by tariffs." The secret? China redirected its export flows toward European and East Asian markets, offsetting the American demand that evaporated under Trump's trade war.

But here's the kicker: Gopinath doesn't think this balancing act can continue indefinitely. Her post ended with a cautionary note that's become something of a meme in economics circles: "hard to see this last."

Record Surpluses That Keep Getting Bigger

China's trade surplus situation is actually even more dramatic than the official numbers suggest. According to Bank of America's Global Investment Strategy data from earlier this year, China's trailing 12-month trade surplus hit an unprecedented $1.2 trillion in August.

To put that in perspective: China's trade surplus has nearly doubled over the past five years, surpassing the record levels that Germany and Japan achieved during their economic heydays in the last century.

And some experts think even these jaw-dropping figures understate reality. Investor Peter Thiel has pointed out that American imports from third countries often contain significant Chinese-made components or value-added contributions that don't show up in bilateral trade data.

Economist Brad Setser has made similar arguments, suggesting China is masking billions in unreported income. His estimate? The hidden figure could exceed $500 billion.

The question now is whether China can keep this export juggling act going, or whether Gopinath's skepticism will prove prescient. For now, at least, China's economy seems to have found a workaround for Trump's tariff wall.