On Tuesday, April 15, UBS, the Swiss investment bank, announced in a report that it has revised down its forecast for China’s GDP growth in 2025 to 3.4%, based on the assumption of tariff increases between China and the United States, as well as the Chinese government implementing more stimulus measures.
Previously, UBS predicted that China’s economic growth rate for this year would be 4%, and it maintained a growth rate of 3% for 2026.
According to Reuters, UBS also expects that in the coming quarters, China’s exports to the United States will drop by two-thirds, and China’s overall exports in 2025 (calculated in US dollars) will decrease by 10%. This forecast also takes into account the impact of the slowdown in the US and global economic growth.
UBS stated, “We believe that in the coming months, some of China’s other trading partners may also raise tariffs on Chinese goods, but this may be limited to specific products, and the extent will not be the same as US tariffs.”
UBS expressed that predicting how tariffs between the US and China will evolve is extremely difficult, but the bank stated that there is still a possibility for discussions and negotiations between the US and China, and both sides may “cancel recent tariff increases in the next one or two months.”
Currently, the Trump administration imposes a 20% punitive tariff on all Chinese products with fentanyl, as well as an additional 125% retaliatory tariff. However, last Friday, Trump temporarily exempted electronic products such as smartphones, computers, and chips from the retaliatory tariff, and indicated that national security tariffs will be imposed on products such as chips in the future. China has also increased its tariff rate on American goods from 84% to 125%.
According to Bloomberg, Goldman Sachs estimates that as many as 20 million people – about 3% of China’s workforce – may be affected by the impact of exports to the US. In a report by Goldman Sachs economists led by Andrew Tilton, Chief Asia-Pacific Economist and Head of Emerging Market Economic Research at Goldman Sachs Research Department, they pointed out, “The extremely high tariffs imposed by the US, sharp decline in exports to the US, and global economic slowdown are expected to bring immense pressure to the Chinese economy and labor market.”
In addition, on April 8, Citibank lowered its forecast for China’s GDP growth in 2025 from 4.7% to 4.2%, citing rising external risks, and after the recent escalation of tensions, the bank believes that the likelihood of reaching an agreement between the US and China is low.