China economic focus April 2025: surviving the trade war

Trade tensions between the US and China have escalated since the announcement of the US reciprocal tariff on 2 April. In the April China economic focus, we discuss how the higher tariffs will impact the Chinese economy. We expect an economic slowdown in China due to the rising tariffs. However, exemptions, re-exports and China’s dominant position in manufacturing will help to partially avoid the economic damage. China’s export-oriented provinces and industrial sectors will face challenges. The government has policy tools available to stimulate the economy and mitigate negative impacts. The trade war is accelerating China's efforts to diversify its trade relationships. China and the EU are likely to develop a closer tie as a result.