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Economists are warning that China’s export growth could weaken or even contract next year as a result of Donald Trump’s tariffs, as the incoming US administration threatens to hamstring a crucial source of expansion for Beijing.
Chinese exports have risen about 5.4 per cent in dollar terms from January to November year on year to $3.2tn, bolstering overall GDP growth at time when authorities have struggled to restore confidence during a drawn-out property slowdown.
But economists widely anticipate a deceleration in 2025 because of the tariffs, which many say will increase the need for Beijing strengthen support for the economy.
Exports “were a big part of economic growth in 2024,” said Robin Xing, chief China economist at Morgan Stanley. “I think that contribution will definitely narrow.”
Trump last month pledged to raise tariffs on Chinese goods by 10 per cent — compared with earlier threats of 60 per cent — though no official decision has been made ahead of his inauguration in January.
While forecasts of their potential impact vary, Goldman Sachs expects Chinese exports to decline 0.9 per cent in US dollar terms next year. Capital Economics also forecasts an outright decline, while UBS and Nomura have projected zero growth in exports.
Other banks, including Morgan Stanley and ING, show exports still rising, but at a much slower rate than in 2024.
A poll of economists published last week by survey firm FocusEconomics estimated Chinese merchandise export growth of just 2 per cent in 2025, sharply down from the 3.9 per cent growth forecast a month earlier.
Diminishing export growth would come at a critical moment for the Chinese economy. President Xi Jinping shifted emphasis towards domestic demand at an annual Central Economic Work Conference last week, in a sign of renewed urgency to boost growth.
Economic data on Monday showed unexpected weakness in retail sales, adding to pressure on policymakers. Beijing has already introduced measures in late September to support stock market prices and a local government refinancing package last month.
Xing of Morgan Stanley warned that slowing export growth was “going to make China’s deflation problem even worse”.
A spokesperson for the National Bureau of Statistics said on Monday that the external environment had become “more complex”.
Ting Lu, chief China economist at Nomura, said the tariffs could start affecting China’s exports from mid-2025 and anticipated that front-loading shipments in the fourth quarter would also weigh on growth. In the absence of obstacles such as tariffs, he projected export growth of 4-5 per cent.
Julian Evans-Pritchard, head of China economics at Capital Economics, suggested large-scale tariffs would not be introduced until the second quarter. He said exports would remain “healthy” until then, but anticipates a sharper decline of 3.5 per cent in 2026.
Beijing is under pressure to reach its official annual economic growth target of around 5 per cent, which Xi said this month he was “fully confident” of reaching.
Goldman Sachs estimated that exports will ultimately contribute nearly three-quarters of overall GDP growth in 2024, which they forecast at 4.9 per cent. They expect that figure to fall to 4.5 per cent next year as a result of a loss of export growth.
Economists have based their estimates for export and GDP growth on a range of tariff scenarios. For example, Barclays expects a 0.8-1 percentage point GDP hit from trade tensions, assuming tariffs of 30 per cent.
Under 60 per cent tariffs, Macquarie said China’s total exports would fall 8 per cent, GDP would decline 2 percentage points and Beijing would have “no choice but to escalate stimulus”.
But Larry Hu, chief China economist at Macquarie, said it was “almost impossible” to forecast exports given uncertainties over the “size, timing and implementation of the tariffs”.
Additional reporting by Haohsiang Ko in Hong Kong
