Despite escalating tensions with the United States, China’s economy is showing impressive resilience. In the first quarter of 2025, China’s GDP grew by 5.4%, surpassing economists’ expectations of 5.1%. The growth came as a welcome surprise to Beijing, which is facing increasing pressure from Washington’s aggressive trade policies.
President Donald Trump’s administration has significantly escalated the trade war, imposing a 145% tariff on a wide range of Chinese goods entering the U.S. Trump has warned that the tariffs will increase even further to 245%, signaling a no-holds-barred approach to confronting what he sees as China’s unfair trade practices. While some electronics like smartphones and laptops have been temporarily exempted, Trump has made it clear that these exclusions may be short-lived.
In retaliation, China has hit back with a 125% tariff on American imports. Despite the tit-for-tat measures, Beijing has been pushing a strong narrative: China’s economy can withstand the pressure. Deputy Commissioner Sheng Laiyun of the National Bureau of Statistics emphasized that the country is experiencing “high-quality growth” and highlighted domestic consumption as a key driver of resilience.
Tariffs Bite, But China Adapts
Experts say Chinese exporters are already adapting to the new landscape. Mark Wu, a professor at Harvard University, noted that many companies are rerouting goods through third countries to avoid the steep tariffs. “This is a game of cat-and-mouse,” Wu said. “Chinese businesses are finding creative ways to dodge the economic bullets.”
Still, major financial institutions remain cautious. UBS, Goldman Sachs, and Citigroup have all downgraded their forecasts for China’s economic growth for the remainder of the year. UBS now predicts a slowdown to 3.4% growth, citing concerns over the long-term effects of the tariffs.
Meanwhile, Trump remains defiant. In a recent post on Truth Social, he doubled down on his strategy, saying, “No one’s getting off the hook—especially not China.”
The trade war has already strained global supply chains, increased costs for consumers, and introduced new layers of uncertainty for international businesses. As the standoff continues, both China and the United States appear prepared to dig in for a prolonged economic battle. The world watches as two of the largest economies flex their muscles—but it remains to be seen who will blink first.
