Trump's tariff will destroy China! Expert claims - GDP may fall by 2 percent

The new 34 per cent duty imposed by the US on Chinese exports could impact China's gross domestic product (GDP) by 2 to 2.5 per cent, further impacting the already sluggish Chinese economy. Larry Hu, chief China economist at investment bank Macquarie, estimates that the latest US retaliatory tariffs could reduce China's exports by 15 percentage points. This could reduce GDP growth by two to 2.5 percentage points. "The impact could be reflected through a variety of channels, such as a drop in US demand for Chinese goods, a possible global economic slowdown and export redirection," Hu wrote in a research report, according to a report published in the Hong Kong-based South China Morning Post on Monday.

What is China's GDP target?

China has set a 5 percent GDP growth target this year for its economy, which is struggling with sluggish domestic consumption and a crisis in the housing sector. The latest 34 percent tariff brings total duties on Chinese exports to 54 percent. US President Donald Trump had imposed a 15 percent tariff on China during his first term. After this, President Joe Biden maintained this tariff.

China's exports to the US are $438 billion

China's exports to the US, its third-largest market, were $438 billion last year, while its imports from the US were $143 billion. US President Trump has imposed tariffs on Chinese products, accusing it of failing to stop the flow of raw materials for making 'fentanyl'.

Fentanyl is a powerful opioid that is blamed for causing widespread drug addiction in the US. China retaliated by imposing a 34 per cent tariff on products exported to the US, targeting agricultural products that affect American farmers.

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