Larry Hu, chief China economist at investment bank Macquarie, estimated that the duties could lower China’s exports by 15 percentage points and its gross domestic product growth by 2-2.5 percentage points.
“The impact could manifest itself through multiple channels such as falling US demand for Chinese goods, the potential global economic slowdown and the hit on export re-routing,” Hu wrote in a research report, the Hong Kong-based newspaper South China Morning Post reported on Monday.China this year has fixed a 5% GDP growth target as its economy struggles with a slowdown weighed down by stagnating domestic consumption and a housing sector crisis. With the latest 34% tariffs, Trump’s levies on Chinese exports amounted to 54%. This is in addition to about 15% tariffs slapped during Trump’s previous term. Trump’s successor Joe Biden retained those duties.
Furthermore, Trump ended the duty-free exemption for China’s small parcel exports, which amounted to $30-50 billion annually. Consequently, China’s exports, a major driver of economic growth, are poised for a sharp decline, the SCMP report said.
