UBS: 60%of the US tariffs will lead to halving Chinas economic growth rate

The latest research by UBS groups shows that if the United States levies 60%of new tariffs on all Chinese goods in the United States, it will lead to a decrease of an annual growth rate of China's economy by more than halving.This highlights the risk of former US President Trump's re -entry into the White House to Beijing.

According to Bloomberg, it was reported earlier this year that Trump is considering a unified tariff of 60%of China's imported goods.A report released by UBS economist on Monday (July 15) shows that if the situation occurs, China's next annual GDP (GDP) will decrease by 2.5 percentage points.

Following the 5.2%economic growth in 2023, Beijing strives to achieve a growth of about 5%this year.

UBS's prediction is based on this assumption: some trade passes through the third country transfer, China will not retaliate, and other countries will not levy tariffs on Chinese products with the United States.UBS economists wrote in the report that half of the drag on economic growth will come from the decline in exports, and the rest comes from the crackdown on consumption and investment.

UBS chief Chinese economist Wang Tao and others said that over time, through more exports and production through other economies, it will help reduce the impact of US tariffs.There is a risk of improving tariffs on imported products in China.

Exports are the strong growth momentum of the Chinese economy this year. So far, net exports account for 14%of the economic expansion, and the trade surplus last month has also risen to a record level;More and more countries impose tariffs or consider measures to respond.

UBS predicts that China's economy in 2025 will increase by 4.6%and will increase by 4.2%in 2026.The bank also estimates that even if some stimulus policies have been introduced to counter any tariffs, the growth rate of these two years may also drop to 3%.

UBS reports that the government may take financial measures and loose monetary policies to reduce the impact of the significant increase in tariffs, and related funds may come from the issuance of special government bonds.Economists reported in the report that the People's Bank of China may depreciate the RMB 5%to 10%.