Xi Jinping’s on track to break his own trade surplus record.

That was the overarching message from trade data out of Beijing on Tuesday, and it won’t go over well in Washington and Brussels, even as trade negotiators for the White House are more focused on Canada than China.

Xi’s trade gap was $120 billion in August, figures from China’s customs authority showed. That was up from July and brings the YTD surplus to something like $807 billion.

A second consecutive $1 trillion+ trade gap with the world is now a virtual guarantee, and it seems just as likely as not that the surplus in 2026 will exceed 2025’s record $1.2 trillion.

As I wrote in “China’s Looming Crisis,” quoting former US Trade Representative Michael Froman, “global demand simply isn’t rising fast enough to absorb Chinese exports at this pace, in key sectors or in aggregate.”

The implication: Even if it were politically feasible for China to keep flooding the world with cheap goods — and it isn’t — it’s not mathematically possible. Eventually, Xi has to figure a way to revive China’s domestic consumption impulse.

As the figure below shows, the value of exports rose 25% in August versus the same month a year ago. Although that actually trailed consensus, it nevertheless marked the third consecutive month during which export growth exceeded 23%.

Imports, meanwhile, rose more than 28%. Import growth’s exceeded 25% every month in 2026 except one.

Importantly — and as the text on the chart reminds you — a lot of this is the price impact of shortages tied to the AI buildout. But trade volumes are up too.

Brad Setser who, God bless him, seems to live for the monthly China customs data, was all over it. “The $120 billion monthly trade surplus is of course impressive in its own right, as August isn’t a month where China’s surplus typically over performs,” he said Tuesday, on social media.

“China’s importing a ton of gold and oil prices are way up [so] the headline surplus should be falling [but] it isn’t,” Setser, who held an advisory role in the Biden administration and before that served the Obama Treasury as deputy assistant secretary for international economic analysis, went on. There’s “no sign in the August data that China’s surplus is about to self correct,” he wrote. “Or that Xi will reverse course and do a big demand stimulus without a bit of external pressure.”

If you were curious, China’s surplus with the US was nearly $30 billion last month. That was up almost 45% YoY, and the largest imbalance of Donald Trump’s second term. In Trump’s vernacular, America was a “loser” in August, and “bigly.”

Don’t worry, though. Trump will get around to fixing it. He just has to address more pressing threats to US economic security first. Like Bombardier.