Trump’s Tariffs Threaten China's Economic Growth

S&P Global Ratings has reduced China's GDP forecasts due to threats of high US tariffs under President-elect Donald Trump. The forecasted GDP growth is now at 4.1% for 2025 and 3.8% for 2026, impacting exports, investment, and the yuan. Other banks like UBS and Barclays also revised their forecasts.

S&P Global Ratings, a leading credit rating agency, has lowered its GDP forecast for China over the next two years, citing potential impacts from US President-elect Donald Trump's threats of increased tariffs on Chinese exports. The forecast now predicts a growth of 4.1% in 2025 and 3.8% in 2026, marking a decline of 0.2 and 0.7 percentage points from earlier projections.

The anticipated US tariff increases are expected to significantly impact China's export growth and investment climate. This uncertainty, even before tariffs are implemented, has already begun affecting investments, according to a report by S&P Global's economists. Inflation forecasts are lowered, and a weaker yuan is projected as a result of these tariffs.

Additional analysis by UBS and Barclays aligned with this cautious outlook, also revising their growth estimates downwards. With China's fixed GDP target at around 5% this year, the country is implementing various stimulus measures to offset potential losses, including a USD 839 billion plan to aid local governments with debt refinancing.

(With inputs from agencies.)