Trump's threat of tariffs heightens fears over China's growth - FT
Kyiv • UNN
Economists predict a significant slowdown or drop in Chinese exports in 2025 due to possible new US duties. Goldman Sachs expects a 0.9% decline in exports, which will affect China's overall GDP growth.
Economists warn that China's export growth could weaken or even decline next year due to Donald Trump's tariffs, as the new US administration threatens to undermine Beijing's most important source of expansion, UNN reports citing the Financial Times.
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China's exports grew by about 5.4% in dollar terms from January to November year-on-year to $3.2 trillion, bolstering overall GDP growth at a time when the authorities were struggling to restore confidence during a protracted real estate downturn.
However, economists generally expect a slowdown in 2025 due to tariffs, which many believe will increase the need for Beijing to increase its support for the economy.
Exports "were a big part of economic growth in 2024," said Robin Xing, chief China economist at Morgan Stanley. - "I think that contribution will definitely decline.
Last month, Trump promised to raise tariffs on Chinese goods by 10 percent - down from earlier threats of 60 percent - although no official decision was made before his inauguration in January.
Although their forecasts of the potential impact differ, Goldman Sachs expects Chinese exports to decline by 0.9 percent in dollar terms next year. Capital Economics also predicts a clear decline, while UBS and Nomura forecast zero export growth.
Other banks, including Morgan Stanley and ING, show that exports will still grow, but at a much slower pace than in 2024.
A survey of economists released last week by research firm FocusEconomics estimated growth in Chinese goods exports at just 2 percent in 2025, sharply lower than the 3.9 percent growth forecast a month earlier.
The decline in export growth will come at a critical time for the Chinese economy. Last week, at the annual Central Economic Work Conference, Chinese President Xi Jinping drew attention to domestic demand, which was a sign of renewed urgency in stimulating growth.
Monday's economic data showed unexpected weakness in retail sales, which increased pressure on policymakers. In late September, Beijing had already taken measures to support stock market prices and provided a refinancing package to local governments last month.
Morgan Stanley's Xing warned that the slowdown in export growth would "further exacerbate China's deflation problem.
A spokesman for the National Bureau of Statistics said on Monday that the external environment has become "more complex.
Ting Lu, chief China economist at Nomura, said that tariffs will start to affect China's exports from mid-2025, and suggested that fourth-quarter shipments ahead of schedule will also put pressure on growth. In the absence of obstacles such as tariffs, he forecasts export growth of 4-5 percent.
Julian Evans-Pritchard, head of China economics at Capital Economics, suggested that a large-scale tariff would not be introduced until the second quarter. He said that exports will remain "healthy" until then, but expects a sharper decline of 3.5 percent in 2026.
Beijing is under pressure to meet its official annual economic growth target of around 5 percent, which Xi Jinping said this month he was "fully confident" of achieving.
Goldman Sachs estimates that exports will eventually contribute almost three-quarters of total GDP growth in 2024, which they forecast at 4.9 percent. They expect this figure to fall to 4.5 percent next year as a result of the loss of export growth.
Larry Hu, Macquarie's chief China economist, said it was "virtually impossible" to predict exports given the uncertainty over "the size, timing and implementation of tariffs.
