China will grow 4.6% next year and 4.2% in 2026. Those figures would fall to 3% in both years if the US tariffs actually happen.
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| The US raising tariffs to 60% will cause China's growth rate to slow sharply. (Source: Getty Images) |
In early 2024, former President Donald Trump was reportedly considering a flat 60% tariff on Chinese imports, if he returned to the White House.
The policy will cut China's gross domestic product (GDP) by up to 2.5 percentage points by 2025, UBS Group said in a recent report.
The financial institution's forecast is based on the assumption that some trade is diverted through third countries, that Beijing does not retaliate, and that other countries do not join Washington in imposing tariffs.
Half of that drag will come from a drop in exports, while the rest will come from the impact on consumption and investment, the bank's economists said.
Rising exports and manufacturing in other economies could help cushion the impact of higher US tariffs, UBS said in the report, but there is still a risk that other countries will also raise tariffs on imports from China.
Exports are a strong growth driver for the world's second-largest economy in 2024, with net exports accounting for 14% of growth so far and the trade surplus rising to a record in June 2024.
However, the Northeast Asian nation's export strength has caused complaints from trading partners.
A growing number of countries are imposing tariffs or considering steps to counter China's trade imbalance.
Beijing's retaliation could also increase the impact of tariffs, as it would push up import costs, the UBS Group report said.
In the event of another trade war, the risk and uncertainty alone could drive US importers away from the market, even if tariffs are eventually reduced.
UBS forecasts China will grow 4.6% next year and 4.2% in 2026. Those figures would fall to 3% in both years if tariffs actually go ahead, even if Beijing implements stimulus to counteract the impact of those tariffs.
Source: https://baoquocte.vn/kinh-te-trung-quoc-bi-anh-huong-the-nao-neu-ong-trump-tro-lai-nha-trang-va-ap-thue-278895.html
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