China’s economy shows resilience amid trade war pressures

[WORLD] China’s economy demonstrated notable resilience in April, managing to weather the impact of steep tariffs that remained in place until a recent agreement between Washington and Beijing paused or lifted most of the duties imposed during their prolonged trade dispute.

Industrial production proved sturdier than expected under the strain, suggesting Chinese manufacturers had already begun adjusting to the trade environment by broadening supply chains and stimulating domestic consumption. Analysts point out that industries such as electronics and machinery—key targets of U.S. tariffs—maintained stability, buoyed in part by rising exports to emerging markets including Southeast Asia and Africa.

With the new deal offering a 90-day suspension of additional tariff actions, April stands out as the only recent month where the full brunt of the punitive duties was reflected in official data—at least for now.

Still, the impact was uneven. The automotive sector, in particular, experienced a marked deceleration. Vehicle production growth slowed to 4.5% year-on-year in April, down from 7.3% in March. The decline coincides with a reported drop in exports to the United States, as American buyers appeared cautious amid ongoing policy uncertainty. The auto sector’s performance underscores how some parts of the economy remain more vulnerable to trade friction than others.

Overall, industrial output expanded by 6.1% in April compared to a year earlier, down from March’s 7.7% pace, according to figures released Monday by the National Bureau of Statistics. The result still surpassed market expectations, beating the 5.21% growth forecast compiled by financial data provider Wind.

Economists warn that despite April’s better-than-expected numbers, the lingering effects of earlier tariffs—such as restrained capital spending and weaker export orders—could continue to dampen growth in the months ahead. In response, Chinese authorities have rolled out targeted stimulus efforts, including tax relief for manufacturers and improved access to financing, to help offset the drag.

Global financial markets have reacted cautiously to the truce, with investors awaiting more concrete signs of a lasting resolution. While the pause has eased some short-term pressures, concerns persist over unresolved structural issues like intellectual property protections and technology transfer demands, which remain sticking points in U.S.-China negotiations.

Analysts are now turning their attention to June’s economic indicators to evaluate whether the temporary tariff suspension will reignite trade momentum. A rebound in activity could bolster China’s leverage in future talks, while signs of further weakness may prompt additional policy support to sustain the recovery.