By South China Morning Post | Created at 2025-03-17 22:01:31 | Updated at 2025-03-18 21:25:53
23 hours ago
China’s economy is set to slow further as a result of new tariffs imposed by US President Donald Trump, with global repercussions, the Organisation for Economic Cooperation and Development said on Monday.
According to the OECD’s latest outlook, the Chinese economy will likely grow by 4.8 per cent this year before slowing to a 4.4 per cent clip in 2026. The organisation attributed part of the deceleration to the 20-percentage-point increase in tariffs imposed by the US on Chinese imports, which has triggered retaliatory action by Beijing.
Escalating tensions between the world’s two largest economies have elicited global concerns, with several experts apprehensive about the potential for a more protracted trade conflict than the one he started in his first term.
Last month, Trump signed executive orders imposing a 10 per cent tariff on all Chinese imports citing alleged intellectual property theft, forced technology transfers and the damage caused by fentanyl exported from China as reasons for the decision. China retaliated with 15 per cent tariffs on US coal, liquefied natural gas, oil and agricultural machinery.
In response, Washington raised tariffs further to 20 per cent on March 4 – and Beijing came back with additional tariffs on US chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products.
If the OECD forecast holds, China is likely to see economic growth slightly below its target this year.
Earlier this month, Chinese Premier Li Qiang projected growth of ‘around 5 per cent’ in his work plan at the Two Sessions, without setting a specific figure. Li also said he expected inflation this year at 2 per cent and urban unemployment at about 5.5 per cent.
