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China’s economy expanded 5.4 per cent in the first quarter of this year as producers frontloaded exports to beat higher tariffs imposed by US President Donald Trump, official data showed.
The GDP figures are China’s first since Trump unleashed his trade war, which threatens to drive a full decoupling between the world’s two largest economies at a time when Chinese households are already struggling to recover from a deep property slowdown.
The growth was in line with China’s growth rate in the fourth quarter and exceeded Beijing’s full-year growth target for 2025 and the 5.1 per cent forecast by analysts in a Reuters poll.
Beijing has set a target of 5 per cent growth for this year and has backed this up with pledges to increase stimulus measures, setting a record budget deficit target for the central government.
But private-sector economists are downgrading their forecasts for economic growth in the wake of Trump’s trade war, with Morgan Stanley cutting its estimate for China’s GDP growth from 4.5 per cent to 4.2 per cent for this year.
The US president has imposed additional tariffs totalling 145 per cent on Chinese goods, although he has granted what he has said were temporary exemptions for some goods such as smartphones and electronics.
UBS estimated that slightly less than 60 per cent of US imports from China were subject to the maximum 145 per cent tariff, with the rest facing tariff rises of 20-45 per cent as of last week.
China has responded with retaliatory tariffs of 125 per cent, setting the stage for a hard decoupling between the world’s two largest economies.
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