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<Research>BOCI China Expects US Reciprocal Tariffs to Dent CN GDP by ~0.76-1.5ppts, Believes Macro Policies to Hedge Tariff Hit
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BOCI China released a report assessing the impact of the "reciprocal tariffs" on China announced by the U.S. last week. If 54% of the new tariffs are fully borne by Chinese exporters, export growth would subside by 4.9ppts, and GDP growth would slow by 1.5ppts. If Chinese exporters bear half of the new tariffs, the impact on Chinese exports would approximate 2.5ppts, with GDP growth affected by about 0.76ppts. Whether the tariff burden falls entirely on Chinese exporters remains uncertain and depends on factors such as bargaining power along the supply chain for specific products. The broker believed China’s macro policies can mitigate the tariffs’ impact. Its model estimated that a 1% increment in Chinese export prices leads to a 0.62% drop in export volume. Based on this, if the U.S.’s 54% tariff hike is fully absorbed by Chinese exporters, China’s exports to the U.S. would fade by approximately 33.5%. In 2024, China’s exports to the U.S. accounted for 14.7% of its total exports; a 33.5% decline in U.S.-bound exports would subtract China’s total export growth by 4.9ppts. Correspondingly, if Chinese exporters bear half of the new tariffs, the impact on total exports would be around 2.5ppts. AAStocks Financial News |
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