In the context of global uncertainty shocks and the long-term development of China’s trade surplus, it is a great significance to study the effect and mechanism of trade imbalance on the labors’ wage share. This paper uses panel data from 270 prefecture-level cities in 28 provinces of China from 2005 to 2022 to empirically test the relationship between trade imbalance and labor’s wage. The research finds that trade imbalance is not conducive to the increase in the share of labor’s wage in China. Mechanism analysis reveals that an increase in trade imbalance reduces wage share in the national economy through three mechanisms: suppressing employment levels in labor and technology-intensive industries, increasing employment levels in capital-intensive industries, promoting capital-biased technological progress, and promoting the rationalization of the industrial structure. Heterogeneity tests show that the negative impact of trade imbalance on the share of wage is mainly reflected in the eastern and central regions, as well as within coastal and port city clusters. Further research finds that an increase in trade surplus is conducive to narrowing the wage gap within cities and between cities.