A senior Chinese economic official has stated that US tariffs are exerting “pressure” on the nation’s economy and trade, despite the release of first quarter growth figures that exceeded forecasts.
“Currently, the high tariffs imposed by the US will create certain strains on our foreign trade and economic landscape,” said Sheng Laiyun, deputy commissioner of China’s National Bureau of Statistics, during a press conference.
China reported an impressive 5.4% growth in its economy during the first quarter, as exporters hurried to ship goods out of factories before new US tariffs took effect.
This comes amidst an escalating and high-stakes diplomatic standoff between China and the United States since US President Donald Trump initiated a series of global tariffs aimed particularly at Chinese imports.
Official data provided early insight into how the fears surrounding the trade war are impacting the delicate recovery of the Asian giant, which was already grappling with weak consumption and a crisis in the property market linked to high levels of debt.
The National Bureau of Statistics of China indicated that “preliminary estimates show that the gross domestic product for the first quarter… (was) up by 5.4% year on year at constant prices.”
Retail sales, a vital indicator of consumer demand, increased by 4.6% year-on-year, according to the NBS, while industrial production surged by 6.5% in the first quarter of the year, marking an increase from 5.7% in the last quarter of 2024.
However, China cautioned that the global economic environment is becoming increasingly “complex and severe,” emphasizing the need for enhanced measures to stimulate growth and consumption.
Donald Trump initiated a global tariff targeting Chinese imports
“The foundation for a sustained economic recovery and growth has yet to be firmly established,” the NBS mentioned, calling for “more proactive and effective macroeconomic policies.”
Data released earlier this week revealed that China’s exports surged more than 12% year-on-year in March, exceeding expectations. Analysts linked this surge to a “front-loading” of orders ahead of President Trump’s so-called ‘Liberation Day’ tariffs on April 2.
The US president remarked this week that the “ball is in China’s court” concerning the reduction of those tariffs, a sentiment echoed by White House Press Secretary Karoline Leavitt last night.
China’s economy, the second largest in the world, was already facing challenges in recovering from a downturn caused by the pandemic, with the double-digit growth rates that previously characterized its rise now a memory of the past.
Last year, it implemented a series of bold measures aimed at revitalizing the economy, including interest rate reductions, lifting restrictions on home purchases, raising the debt ceiling for local governments, and enhancing support for financial markets.
However, following a market rally last year fueled by hopes for a significant “bazooka stimulus,” optimism diminished as authorities did not specify the bailout figure or elaborate on their commitments.
Last month, China’s top leaders set an ambitious annual growth target of around 5%, pledging to make domestic demand the primary engine of economic activity.
Many economists view this target as ambitious given the underlying challenges facing the economy.
