Chinese economy grows despite Trump’s tariff

The country’s GDP expanded 5.2% in the second quarter, compared to the same period of the previous year. But impulse-favored scenario to pretariff exports may get worse in the second half of the year.

China’s economy grew 5.2% in the second quarter of 2025 compared to the same period last year, according to the National Office of Chinese statistics on Tuesday (15/07).

Gross Domestic Product Growth (GDP) occurs despite continuous commercial tensions with the United States and follows a 5.4% expansion in the first quarter of the year, also compared to the same period as 2024. However, analysts evaluate that the scenario may worsen in the second half of the year.

The performance of the first semester was supported by state stimuli and a break on the climbs of the US and China trade war. This allowed Chinese exporters to anticipate shipments before possible tariff increases, which momentarily expanded exports.

The result maintains the world’s second largest economy in line with the government’s annual goal of “about 5%”.

“China has reached growth above the 5% official goal in the second quarter, in part due to export advance,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

According to the Institute of Economic Research and Consulting Prognos Institute, Chinese companies now account for 16% of global exports, twice the participation of Germany, for example, increasing competitiveness in the international commercial scenario.

Growth may not be sustainable

Although China remains stable in the face of tariff dispute with the US, analysts evaluate that the pace of growth may not be sustainable.

The country is experiencing a weakened internal demand and still awaits the impact of global trade, which is expected to undergo a new adjustment if the barriers imposed by US President Donald Trump, in force for most countries on August 1.

Exports to alternative markets in recent months and the attempted US companies to increase product stock have also helped mask the weakening of internal demand, which has caused a rapid drop in retail prices and real estate market.

“The crisis of the real estate sector is still a major medium -term pressure factor on local governments budgets,” said Dan Wang, Eurasia Group economist.

Meanwhile, investors are already preparing for a weaker second half, even with the expectation that new stimuli will be announced at the next government executive meeting in July.

Trade War between China and USA

Tensions between China and the USA follow high and can put a brake on the discharge of Chinese exports in recent months, which helped leverage the results of the first half.

At the moment, American rates for Chinese products remain reduced to 30% to make negotiations between countries, which should last until mid -August.

If there is no agreement, the US threatens to impose a 145% surcharge on Chinese products, as announced in April by Trump.

If the trade war is climbing again, China may try to use the European Union and Latin Union market to absorb excessive production.

In turn, the US could redefine EU -made products with Chinese direct investment such as Chinese products and demand higher tariffs from European companies.

Originally published by DW on 07/15/2025