China has just crossed a staggering economic threshold, posting a trade surplus of over $1 trillion (approx. KES 139 trillion) in the first 11 months of the year. It is a figure that projects immense power, yet beneath the surface, it exposes a critical vulnerability: the world’s second-largest economy is still dangerously addicted to selling its goods abroad rather than consuming them at home.

For Kenyan observers, this record-breaking statistic is a double-edged sword. It signals that the global supply chain is still churning, but it also highlights the friction in the machinery of global trade—friction that inevitably ripples down to import-dependent economies in East Africa.

The Tariff War Reality

Data released on Monday paints a picture of an economy running on uneven ground. While the total surplus hit $1.076 trillion, exports to the United States have collapsed, plummeting by nearly a third in November alone. This sharp decline is the direct fallout of a bruising trade war that has seen tariffs weaponized by Washington to protect American industries.

Chinese Premier Li Qiang, speaking on Tuesday, did not mince words regarding the standoff.

“The mutually destructive consequences of tariffs have become increasingly evident,” Li warned, signaling Beijing's frustration with the protectionist policies championed by figures like Donald Trump.

However, the drop in direct trade with the US has sparked fears elsewhere. Analysts worry that if Chinese manufacturers cannot sell to Americans, they will flood other markets—including Europe, Southeast Asia, and Africa—with underpriced goods. For a Kenyan manufacturer in Industrial Area trying to compete with imported electronics or textiles, this "flooding" is a potential existential threat.

The Trans-shipment Shuffle

But the story is not as simple as goods just stopping at the US border. Global trade has found a loophole. Experts suggest that the demand for cheap Chinese goods in America hasn't disappeared; it has simply taken a detour.

This phenomenon, known as trans-shipment, involves routing goods through a third country to bypass tariffs. The data supports this theory:

• Indonesia: US imports from Indonesia surged to $23.1 billion (approx. KES 3 trillion) in the first eight months of the year—a nearly 33% jump compared to 2024.
• Malaysia & The Philippines: Both nations have seen similar unexplained spikes in exports to the US.

“Experts believe this rise is largely down to Chinese goods being redirected,” the report notes. It is a global shell game: the label might change, but the factory of origin remains the same.

Why It Matters for Kenya

The implications for Nairobi are subtle but significant. As the US tightens its borders against direct Chinese imports, Beijing is under immense pressure to keep its factories running. This often leads to an aggressive search for new markets.

While this ensures a steady supply of affordable consumer goods entering Mombasa—from smartphones to construction materials—it underscores a global imbalance. China’s mammoth ability to produce at scale and low prices is unmatched, but its reliance on external markets makes the entire global system fragile.

If the trans-shipment loopholes are closed by future US administrations, that inventory will have to go somewhere. As the trade map is redrawn, emerging markets like Kenya must watch closely to ensure they don't become collateral damage in a battle between giants.