China’s economic growth is projected to slow due to the United States imposing 145% tariffs on Chinese imports. Yet, the opportunity to expand trade with regional neighbours could help offset damage to China’s GDP growth.
Economists from the Asean+3 Macroeconomic Research Office (AMRO) anticipate that these tariffs could reduce China’s GDP growth by up to one percentage point, potentially limiting expansion to 4.8% in 2025. This projection is based on a strong first quarter followed by weaker performance in the latter half of the year.
To mitigate the impact of reduced access to the U.S. market, China is strengthening trade and investment ties with Southeast Asian nations. Enhanced economic relationships with countries like Vietnam, Thailand, and Malaysia are expected to help offset the adverse effects of U.S. tariffs. This strategic pivot aims to sustain China’s export levels and support overall economic stability amid escalating trade tensions.
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Context & Background
The U.S.-China trade war has intensified with the United States implementing substantial tariffs on Chinese goods, escalating from initial measures to a current rate of 145%. In response, China has imposed retaliatory tariffs of 125% on U.S. imports. These actions have significantly disrupted global supply chains and trade dynamics.
In light of these challenges, China has been actively seeking to diversify its trade partnerships, particularly within the Southeast Asian region. Countries such as Vietnam, Thailand, and Malaysia have become focal points for Chinese investment and trade, serving as alternative markets to mitigate the impact of reduced access to the U.S. market. This strategic shift underscores China’s efforts to maintain economic growth and stability amid ongoing trade tensions.
In This Story
Asean+3 Macroeconomic Research Office (AMRO)
AMRO is a regional macroeconomic surveillance organization that monitors and analyzes the economies of the Association of Southeast Asian Nations (ASEAN) member states, along with China, Japan, and South Korea. It aims to contribute to the macroeconomic and financial stability of the region.
Association of Southeast Asian Nations (ASEAN)
ASEAN is a regional intergovernmental organization comprising ten Southeast Asian countries, which promotes intergovernmental cooperation and facilitates economic, political, security, military, educational, and sociocultural integration among its members and other Asian states.
United States Trade Representative (USTR)
The USTR is an agency of the U.S. federal government responsible for developing and recommending U.S. trade policy to the President, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government.
Ministry of Commerce of the People’s Republic of China
The Ministry of Commerce is the national executive agency of the Chinese government responsible for formulating policy on foreign trade, export and import regulations, foreign direct investments, consumer protection, market competition, and other related issues.
Donald Trump
Donald Trump is the 45th President of the United States, serving from 2017 to 2021, and was re-elected for a second term starting in 2025. His administration has been characterized by a focus on protectionist trade policies, including the imposition of tariffs on Chinese imports.
Xi Jinping
Xi Jinping is the General Secretary of the Communist Party of China and the President of the
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