There remains considerable uncertainty around the global trade environment – particularly the US-China trade relationship – following the rapid escalation of tariffs post early April’s “Liberation Day” announcements even allowing for subsequent exemptions (for consumer electronics and an easing of auto part tariffs). Commentary within China has suggested that there is little expectation of improvement in the relationship – with editorials in newspapers telling the public to prepare for a protracted trade war. Tariff rates at their current extreme levels will drastically reduce trade flows between the US and China – already seen in reduced bookings for global shipping – with the potential for this to have a sizeable impact on China’s near term economic prospects.

For further details, please see the China Economic Update (May 2025)