{"id":2038,"date":"2025-08-01T10:55:43","date_gmt":"2025-08-01T10:55:43","guid":{"rendered":"http:\/\/ft365.org\/index.php\/2025\/08\/01\/the-curious-economist-chinas-economy-grows-5-4-but-can-it-withstand-trumps-tariff-tsunami\/"},"modified":"2025-08-01T10:55:43","modified_gmt":"2025-08-01T10:55:43","slug":"the-curious-economist-chinas-economy-grows-5-4-but-can-it-withstand-trumps-tariff-tsunami","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/08\/01\/the-curious-economist-chinas-economy-grows-5-4-but-can-it-withstand-trumps-tariff-tsunami\/","title":{"rendered":"The Curious Economist | China\u2019s Economy Grows 5.4% \u2014 But Can It Withstand Trump\u2019s Tariff Tsunami?"},"content":{"rendered":"<div data-id=\"13cdd6e\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<p><span>China\u2019s economy started 2025 with stronger-than-expected momentum, growing by 5.4% in Q1\u2014comfortably above forecasts of 5.1%. It\u2019s a solid showing for the world\u2019s second-largest economy, especially as the full impact of U.S. tariffs under President Trump is yet to be felt.<\/span><\/p>\n<p><span>Retail sales jumped 5.9% in March, and industrial production surged 7.7%. Exports were especially strong\u2014rising 12.4%\u2014as firms rushed to beat the April deadline for Trump\u2019s new wave of tariffs, now averaging 145% on Chinese imports.<\/span><\/p>\n<p><span>But economists are warning that this early boost is likely temporary. UBS and Goldman Sachs have already cut China\u2019s full-year growth forecasts, with some predicting GDP could slow to as low as 3.4% later this year. The logic? Once the export boom fades and tariffs bite, demand for Chinese goods could plummet, affecting jobs, output, and consumer confidence.<\/span><\/p>\n<p><span>So, what are tariffs and why do they matter so much?<\/span><span><br \/><\/span><span> A tariff is a tax placed on imported goods, making them more expensive and giving domestic producers a price advantage. While they can protect local jobs in the short term, most economists see tariffs as a classic form of <\/span><i><span>protectionism<\/span><\/i><span> that often leads to a \u201close-lose\u201d scenario. Consumers face higher prices, exporters suffer, and global trade becomes less efficient. In theory, tariffs cause a <\/span><i><span>deadweight loss<\/span><\/i><span>\u2014a loss of welfare not offset by gains elsewhere.<\/span><\/p>\n<p><span>This case is a classic example of a breakdown in <\/span><i><span>free trade<\/span><\/i><span>, which typically allows countries to benefit from comparative advantage and specialisation. With Trump\u2019s tariffs now covering everything from electronics to toys, the U.S. risks harming its own consumers and firms who rely on cheap Chinese imports, while China faces the challenge of redirecting its trade elsewhere.<\/span><\/p>\n<p><span>Chinese officials, however, remain defiant. The government has pledged more domestic stimulus\u2014likely through fiscal spending and monetary easing\u2014to counteract the external pressures. They\u2019re also pushing to diversify exports, with ASEAN now overtaking the U.S. as China\u2019s largest trade partner.<\/span><\/p>\n<p><span>Meanwhile, Xi Jinping has embarked on a charm offensive across Southeast Asia, signalling China\u2019s commitment to the global free trade system and supply chain stability.<\/span><\/p>\n<p><span>For students of economics, this is a moment where theory meets the real world. The unfolding U.S.\u2013China trade battle offers a front-row seat to explore the consequences of protectionism, the role of tariffs, and the ripple effects on global growth.<\/span><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>China\u2019s economy started 2025 with stronger-than-expected momentum, growing by 5.4% in Q1\u2014comfortably above forecasts of 5.1%. It\u2019s a solid showing for the world\u2019s second-largest economy, especially as the full impact of U.S. tariffs under President Trump is yet to be felt. Retail sales jumped 5.9% in March, and industrial production surged 7.7%. Exports were especially<\/p>\n","protected":false},"author":2,"featured_media":76,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2038","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-global-economy"],"featured_image_urls":{"full":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1.jpg",1536,1024,false],"thumbnail":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-150x150.jpg",150,150,true],"medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-300x200.jpg",300,200,true],"medium_large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-768x512.jpg",640,427,true],"large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-1024x683.jpg",640,427,true],"1536x1536":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1.jpg",1536,1024,false],"2048x2048":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1.jpg",1536,1024,false],"morenews-featured":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-1024x683.jpg",1024,683,true],"morenews-large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-825x575.jpg",825,575,true],"morenews-medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-590x410.jpg",590,410,true],"crawlomatic_preview_image":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/05\/localimages\/China-GDP-Q1-219x146.jpg",219,146,true]},"author_info":{"display_name":"henry","author_link":"http:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"<a href=\"http:\/\/ft365.org\/index.php\/category\/the-global-economy\/\" rel=\"category tag\">The Global Economy<\/a>","tag_info":"The Global Economy","comment_count":"0","_links":{"self":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/2038","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=2038"}],"version-history":[{"count":0,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/2038\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/76"}],"wp:attachment":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=2038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=2038"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=2038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}