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China’s Growth Forecast Slashed to 3.4% in 2025 as US Tariffs Cripple Exports

UBS projects a sharp downturn in China’s economy, with US-bound exports expected to plummet by two-thirds and fiscal stimulus measures struggling to offset the impact.

A UBS logo is pictured on the branch of the Swiss bank in Lucerne, Switzerland, June 14, 2024. REUTERS/Denis Balibouse//File Photo
A view of the city skyline, ahead of the annual National People's Congress (NPC), in Shanghai, China February 24, 2022. Picture taken February 24, 2022. REUTERS/Aly Song/File Photo
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Overview

  • UBS has issued the most pessimistic growth forecast for China among major banks, predicting GDP growth of just 3.4% in 2025 due to the impact of US tariffs.
  • US tariffs are expected to reduce Chinese exports to the US by two-thirds in the coming quarters, with total overseas shipments projected to fall by 10% in dollar terms this year.
  • The tariff increases are estimated to drag down China’s GDP growth by more than 2 percentage points, despite anticipated fiscal stimulus and rate cuts from Beijing.
  • Global banks, including Goldman Sachs and Citigroup, have downgraded their outlook for China, doubting the government’s ability to meet its 5% growth target for 2025.
  • Beijing is expected to implement fiscal stimulus worth up to 2 percentage points of GDP and cut policy rates by 30-40 basis points to counter the slowdown.