China’s Trade War With the U.S. Trade Commission: Progress During Trump’s First Term and a Critical Test of Beijing’s Preparedness

Amid the heightening trade war, China has filed a number of complaints to the World Trade Organization. The new trade envoy is Li Chenggang, a former assistant commerce minister and China’s WTO ambassador.

China exports more to the US than any other country. The tariffs that Mr. Trump imposed and that Beijing retaliated against will hurt Chinese consumers at a time of weak demand and a struggling real estate market. But China is in some respects better prepared today to hold its ground than it was during Mr. Trump’s first term.

On Monday, UBS downgraded China’s 2025 growth forecast to 3.4%, assuming current tariff hikes remain and China rolls out additional stimulus, noting high margins of error due to uncertainty surrounding the tariffs.

The property market in some tier- one cities has been showing signs of stabilization despite the ongoing U.S.-China trade war.

Analysts expect growth in China to slow in the current quarter due to the tariffs.

After years of trade tension, tariffs and general decoupling, China is not as economically tied to the United States as before. Many American companies have reduced their presence in China as they shift manufacturing to other countries. Almost two thirds of goods entering the US from China came before Mr. Trump imposed tariffs. It fell to 13 percent last year. Some of that may be because of the rerouting of Chinese products and components through third countries before they reach the United States, a loophole that the Trump administration is looking to close.

China’s first three-month GDP growth has been boosted by domestic demand, exports, and geo-economic diversification in the last three months

The growth in the first three months was driven in part by strong industrial activity and exports. The government said policies to stimulate domestic demand also helped boost growth.

Gross domestic product grew 5.4% in the period from January to March, compared to the same period last year, official data showed. The poll had the growth expected to be at 5.1%.

But China has been diversifying its export markets to reduce its dependence on the United States: The value of direct Chinese exports to the United States last year was roughly the same as a decade ago; its exports to the European Union, meanwhile, soared in that period. China also has reduced its overall reliance on trade: Exports as a percentage of China’s gross domestic product declined from 36 percent in 2006 to 19.7 percent in 2023, according to World Bank data.