China’s economy outperformed expectations in the first quarter of 2025, even as the trade war with the U.S. intensified.
According to data released on Wednesday by Beijing’s National Bureau of Statistics, China’s growth domestic product (GDP) grew 5.4 percent year-on-year in the first three months of the year. This came in considerably ahead of the 5.1 percent forecast from analysts polled by Reuters.
Why It Matters
Although the preliminary data covers the period before the latest round of increased U.S. tariffs on Chinese exports took effect, Beijing officials have said that the sustained growth reflects the resilience of China’s economy amid rising American protectionism.
President Donald Trump‘s administration has stressed that the U.S. economy will be able to fare better than China’s should the ongoing back-and-forth with tariffs transform into an all-out trade war. Beijing, however, has stressed that the U.S. will suffer the worse effects, and has vowed to fight “to the end” with further retaliatory measures of its own.
Chinese President Xi Jinping waves during a meeting with Vietnamese leader To Lam in Hanoi, Vietnam, on April 14, 2025.
Nhac Nguyen/POOL/AFP via Getty Images
What To Know
Last week, China increased the tariffs placed on U.S. goods to 125 percent, in response to Trump’s announcement that Chinese goods would face a 145-percent tax when entering the U.S.
On Friday, the White House said that smartphones, computers and certain other electronic devices would be exempt from the reciprocal tariffs, a slight relief for China’s export-heavy economy, though Trump has suggested that this will be short-lived.
Experts recently told Newsweek that certain trade practices by Beijing could undermine the impact of Washington’s tariffs, such as the incorporation of third countries into the export chain to bypass China-specific trade measures.
Nicholas Lardy, an expert in Chinese economic and trade policy, said that the Chinese economy would also be able to weather an oncoming trade war better than Washington suspects.
During a news conference following the results on Wednesday, Sheng Laiyun, deputy commissioner of the National Bureau of Statistics, celebrated the preliminary estimates of GDP growth, telling reporters that the national economy “got off to a good start and high-quality growth is picking up.”
Sheng Laiyun, deputy commissioner of the National Bureau of Statistics, on April 16, 2025, in Beijing.
VCG via AP
Sheng added that China has been “diversifying” its international trade partnerships since the U.S. trade war during Trump’s first term, and has significantly reduced its dependence on the United States as an export market since 2018.
However, he warned that the 145-percent tariffs imposed by the U.S.—which he said were in violation of “economic rules as well as World Trade Organization [WTO] regulations”—will “bring certain pressures on China’s trade and economy.”
Sheng also mentioned long-running issues that have hampered China’s long-term economic growth, including weak domestic consumption. He said that Beijing must “reinvigorate consumption and enlarge domestic demand.”
Banks including Goldman Sachs and Citigroup have also lowered their growth projections for China in light of the expected impact of Trump’s tariffs, according to Bloomberg. Swiss investment bank UBS now forecasts the Chinese economy will grow by just 3.4 percent this year, as U.S. tariffs weigh heavily on exports, down from a previous projection of 4 percent.
What People Are Saying
Sheng Laiyun, deputy commissioner of the China’s National Bureau of Statistics, during a press conference on Wednesday, said: “Such a high tariff posed by [the] U.S. will bring certain pressure on China’s trade and economy, but it will not shake the overall picture of a sound pickup momentum in China thanks to China’s good economic foundation, huge potential, and we are confident and capable of responding to the challenge.”
President Donald Trump posted to Truth Social on Sunday: “NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst! There was no Tariff ‘exception’ announced on Friday.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” the post continued. “What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People.”
Mark Wu, a professor of international trade and economic law at Harvard Law School, described the measures taken by Beijing to lessen the impacts of tariffs as “essentially a game of cat-and-mouse.”
“Chinese exporters are increasingly turning to investments or partnerships in third countries in order to lessen the impact of U.S. trade tariffs,” he told Newsweek, adding that, since the first Trump tariffs were imposed in 2017, “Chinese firms have been trying to find loopholes to lessen the tariff impact via third countries.”
What Happens Next?
On Tuesday, the White House said that China could now face a tariff of up to 245 percent on its exports to the U.S. “as a result of its retaliatory actions.”