Commentary: To Ward Off Tariffs’ Impact, Beijing Should Boost Domestic Demand
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Facing Trump’s tariffs, China’s economy will have to rely more on domestic demand. Photo: AI generated
The Trump administration’s April 2 announcement of “reciprocal tariffs” was an economic bomb. The new levies will take the average U.S. tariff rate in 2025 from 2.5% to 22%, the highest since 1910, according to Fitch Ratings’ estimates.
In the short term, global trade and the broader economy will be severely impacted, potentially even sliding into recession. In light of this, the Chinese economy will have to rely more on domestic demand.
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- U.S. "reciprocal tariffs" will raise average tariff rates from 2.5% to 22% in 2025, the highest since 1910, severely impacting global trade and economies.
- China’s export growth has slowed, and reliance on domestic demand and government stimulus has increased, but pressures persist in deflation, weak private investment, and real estate.
- Despite stimulus measures and improved retail sales, China’s economic stabilization remains fragile, requiring intensified policy support.
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Who’s Who
- Fitch Ratings
- Fitch Ratings is a global credit rating agency that provides financial information, research, and credit ratings for various entities, including countries and companies. In the article, Fitch Ratings estimates that the new U.S. reciprocal tariffs will raise the average U.S. tariff rate in 2025 from 2.5% to 22%, the highest since 1910.
- Aletheia Capital
- According to the article content, Aletheia Capital is an investment advisory firm. Vincent Chan, the author of the commentary, is identified as a China strategist at Aletheia Capital. No additional details about the firm are provided in the article.
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