China’s latest tariffs: UBS downgraded to 3.4% and stimulus may slow down after the U.S.-China trade war
Amid the heightening trade war, China has filed a number of complaints to the World Trade Organization. On Wednesday, it appointed Li Chenggang, a former assistant commerce minister and China’s WTO ambassador, as its new trade envoy.
China was hit hardest by President Trump’s latest tariffs. The country is now subject to up to 245% of levies — though many key electronic goods from China have been exempted for now.
On Monday, UBS downgraded China’s 2025 growth forecast to 3.4%, assuming current tariff hikes remain and China rolls out additional stimulus, noting high margins of error due to uncertainty surrounding the tariffs.
There are some signs of stabilization in the tier one city property market, which have been showing signs of decline, but the rapidly worsening U.S.-China trade war might deal them another blow.
Though Beijing has so far been defiant in its response to U.S. tariffs, analysts expect growth in China to slow in the current quarter because of the tariffs.
New tariffs on Chinese imports were imposed by the Trump administration. President Trump also talked up his upcoming “reciprocal tariffs,” which were unveiled in early April.
The First Three Months of Growth in China: Economic Activity, Exports, and Dependence on the USA, and a Comparison with the World Bank
Strong industrial activity and exports helped drive growth in the first three months. Policies to spur domestic demand helped boost growth, the government said.
Gross domestic product grew 5.4% in the period from January to March, compared to the same period last year, official data showed. A Reuters poll had growth expected at 5.1%.
But China has been diversifying its export markets to reduce its dependence on the United States: The value of direct Chinese exports to the United States last year was roughly the same as a decade ago; its exports to the European Union, meanwhile, soared in that period. According to the World Bank, China’s overall reliance on trade declined from 36 percent in 2006 to 19.7 percent in 2023.
