China's Economy Grew Before Tariffs Kicked In

Trump's stiff tariffs on Chinese goods are expected to weaken the country's economy this year

- Jason Douglas

China's economy got a boost in the first quarter from a rush of exports to the U.S. ahead of stiff new tariffs, but growth is set to slow as the trade war between Washington and Beijing heats up.

How serious that slowdown will get depends on how successful Chinese exporters are at finding new markets for goods shut out of the U.S. by sky-high new tariffs. It also depends on how big a boost to spending Beijing can generate at home to offset weakness overseas.

Some economists expect Chinese growth to slow to 4% or less this year, which would mark its slowest expansion in decades, outside of the pandemic years 2020 and 2022. In 2018, when President Trump first hit China with tariffs, its economy shrugged it off to report growth of 6.7% that year.

The Trump administration plans to use tariff negotiations to pressure U.S. trading partners to limit their dealings with China, The Wall Street Journal reported, an effort to put a dent in China's economy and reduce Beijing's leverage in potential trade negotiations between Trump and Chinese leader Xi Jinping.

U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China to ship goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China's cheap industrial goods into their economies.

The U.S. is also facing a tariff-induced slowdown—with some economists anticipating an outright recession as higher prices squeeze consumption and uncertainty over trade pinches business investment and hiring. Trump argues that some short-term pain is necessary as he uses tariffs to push companies to bring manufacturing jobs back to the U.S.

China's economy expanded 5.4% in the first quarter compared with the same period a year earlier, matching the pace notched in the final three months of last year, China's National Bureau of Statistics said.