Trucks are on the line at the container terminal in the port area of Longtan of the province of Nanjing, the province of Jiangsu, China on the evening of 8 April 2025.
CFOTO | Future Publishing | Getty images
BEIJING – CITI On Tuesday, one of the first investment firms to be reduced by China’s growth reasons on escalating trade tensions with the US
In less than a week, American rates on goods from China have more than doubled, while Beijing has returned more tasks and restrictions for American companies.
This year CITI analysts have reduced their prediction for China’s gross domestic product to 4.2%, a decrease by 0.5 percentage point, because they see ‘little room for a deal between the US and China after recent escalations’.
Natixis also told reporters on Monday that the company reduced its China GDP prediction to 4.2% this year, compared to 4.7% earlier.
Morgan Stanley and Goldman Sachs have not yet reduced their predictions, but this week warned of increasing the downward risks for their expectations – both are currently predicting 4.5% growth.
China announced in March that his official growthotum would be “around 5%” before 2025, but emphasized that it would not be easy to achieve the goal.
“The most important issue is that the uncertainty for the economy is increasing,” said Hao Zhou, chief economist at Guotai Junan International, on Tuesday in Mandarin, translated by CNBC. He noted that visibility on future growth had fallen considerably, while American rates could continue to rise.
US President Donald Trump announced an additional 50% rates in Chinese goods that enter the US will take effect on Wednesday after Beijing has increased tasks on all American products by 34%. As part of his plan for major rates in several countries, the White House had said last week that it would add a 34% levy to Chinese goods.
Combined with two rounds of 10% rate increases earlier this year, new American rates on Chinese products have reached 104% in 2025.
Lower the impact of new rates
Although an initial increase in tasks by 50% could reduce Chinese GDP by 1.5 percentage points, a subsequent increase of 50% would drag it down by a smaller 0.9 percentage point, the analysts of Goldman Sachs said in a report on Tuesday.
Chinese exports to the American account for about 3 percentage points of the total GDP of China, said Goldman, and noted that this adds 2.35 percentage points of the domestic value and 0.65 percentage of the corresponding production investments.
China is expected to report the trade details of March on Monday and the GDP of the first quarter on 16 April.
Nomura now expects that China export will fall by 2% this year, worse than their previous expectations of no change, said Chief China Economist Ting Lu of the company in a report Tuesday.
But he kept his GDP prediction of 2025 of 4.5%. “Given the extremely flowing situation, it is impossible to reasonably estimate the impact of the current American trade war on the Chinese economy,” he said, adding that his prediction was already responsible for considerably worse tensions.
This week, China indicated that it could reduce interest rates or increase tax expenses to strengthen growth in the near future.
Decreasing impact of rates can also feed in the calculus of Beijing that the American leverage probably reaches a ceiling, said Yue Su, China, China, in the Economist Intelligence Unit, in an E -mail.
“From the Perspective of Beijing, the strategic profits of a strong retribution now seem to weigh against the corresponding economic costs,” she said.