China Unveils Plans to Mitigate Economic Strain from US Trade War

2025-04-25 global

Beijing, China, Saturday, 26 April 2025.
China may reduce tariffs on key US imports as part of new measures to counter trade war impacts, aiming to stabilize economic growth amid US tariffs.

Targeted Measures to Support Domestic Industries

In response to the escalating trade conflicts with the United States, China has devised comprehensive strategies to bolster its domestic economy. During a politburo meeting on April 25, 2025, the Chinese leadership discussed cutting tariffs on pivotal American goods such as semiconductors and medical equipment to cushion the economic blow from the U.S. tariff hike [1][2]. This decision reflects China’s orientation towards stabilizing its economy by enhancing domestic demand and avoiding further economic fallout from the trade war [3].

Economic Policies and Domestic Support

Emphasizing internal economic resilience, China plans to fortify its economic policies with a multi-pronged approach, including raising unemployment benefits and stimulating incomes for lower- and middle-class families [1]. These steps are designed to invigorate consumer spending and develop sectors like services and real estate, indicating a balanced move towards internal economic strengthening while the global trading atmosphere remains unstable [1][4]. The stimulus strategy aims at mitigating the adverse effects on China’s GDP growth, impacting sectors severely hit by plunging real estate activities since 2020 [4].

International Diplomacy and Future Trade Dynamics

While the focus remains on domestic policy adjustments, China’s diplomatic engagements signal an openness to international cooperation. President Xi Jinping reiterated that tariffs harm the global economic fabric, articulating the need for multilateral trade systems [5]. Despite President Trump’s recent indication of potential tariff reductions, the Chinese Foreign Ministry stated on April 25, 2025, that no tariff negotiations are currently underway [2][6]. By steering clear of a direct confrontation, Beijing seeks a more diplomatic tack, possibly waiting for conditions conducive to formal negotiations.

Analysis and Looking Ahead

As China navigates the intricate balance of counteracting U.S. imposed tariffs while fostering a robust domestic market, economic observers project continued policy evolution. Improved aggregate credit measures and fiscal adjustments are central to counteracting the trade-induced economic slowdown, with a projected gradual recovery in credit impulses [4][7]. Looking forward, China’s strategies may intensify efforts to pivot its economy towards more consumption-based growth, as it strives for a stable trajectory amid ongoing trade tensions [4].

Sources

China trade war