China’s recent economic performance has diverged sharply from the double‑digit growth narratives of past decades. Verified data show that the slowdown stems from a combination of external shocks – especially a renewed U.S.‑China trade confrontation under the second Trump administration – and domestic weakness in consumer demand and the property sector. A careful look at reliable sources allows us to distinguish facts from speculation.
External pressure: tariffs and the trade war
- Trump’s second‑term tariffs: In early 2025 the Trump administration sharply escalated tariffs on Chinese imports. Reuters’ timeline of the trade war notes that a 90‑day truce reduced previously announced U.S. tariffs from 145 % to 30 % and Chinese retaliatory tariffs from 125 % to 10 %. These numbers confirm that both sides deployed punitive tariffs far above the levels seen in the 2018‑2019 trade war. Beijing described Washington’s call for NATO/G7 countries to follow suit on tariffs over Chinese purchases of Russian oil as “unilateral bullying” and “economic coercion”.
- Export shock: The high tariffs have hurt China’s export‑driven economy. Reuters data show that Chinese exports to the United States plunged 33.12 % year‑on‑year in August 2025. This collapse reflects not only tariffs but also U.S. pressure on allies to restrict trade with China.
Internal weakness: consumer and property slump
- Retail sales: Domestic demand has remained weak despite post‑pandemic reopening. Government data compiled by market analysts indicate that China’s retail sales grew only 3.4 % year‑on‑year in August 2025, the slowest pace since November 2024. The modest recovery suggests that consumer confidence is faltering.
- Property sector woes: Real‑estate has been a key source of household wealth, but it is now a drag on growth. A Reuters report shows that property investment fell 12.9 % in the first eight months of 2025 compared with a year earlier, while new construction starts measured by floor area slumped 19.5 % and funds raised by developers declined 8 %. Weaker home prices and delayed projects have eroded household wealth and further dampened spending.
- Stimulus measures: In response, Beijing has introduced a 19‑step plan to bolster consumption. China’s commerce ministry and other agencies issued measures ranging from subsidies for home appliances to support for the services sector. Economists also expect interest‑rate cuts and targeted fiscal support to complement these policies.
Strategic pivot: diversifying trade partners
Brazil
China is seeking new partners to offset strained ties with the United States. A study by the Brazil‑China Business Council (CEBC) reported that Chinese investments in Brazil totalled US$4.18 billion in 2024 – a 113 % increase from 2023. Reuters similarly noted that Chinese direct investment in Brazil more than doubled to about US$4.2 billion in 2024, making Brazil the third‑largest recipient of Chinese capital. Much of this money went into energy and electric‑vehicle ventures.
A major example is COFCO’s STS11 grains terminal at Brazil’s Santos port. Reuters reported that the state‑owned trader is building a terminal capable of handling 14.5 million tonnes of commodities a year at a cost of about US$285 million. While some commentators claim that such facilities could divert revenues from U.S. farmers, reputable reports do not quantify the impact; the evidence simply shows that China is securing alternative supply chains rather than deliberately targeting U.S. agriculture.
India and Russian oil
India has emerged alongside China as one of the biggest buyers of Russian crude following Western sanctions. A Reuters explainer notes that India and China became the largest purchasers of Russian seaborne crude after the invasion of Ukraine. To pressure New Delhi, the Trump administration imposed an additional 25 % duty on Indian goods on Aug. 27, 2025, doubling overall tariffs to 50 %. The duties were a response to India’s continued buying of Russian oil.
Tensions have complicated U.S.–India trade talks. In September 2025, Reuters reported that Washington’s planned visit to New Delhi was cancelled after talks “hit major roadblocks” because India resisted opening its vast agricultural and dairy sectors. Nonetheless, trade officials resumed discussions and a more conciliatory tone raised hopes that a deal could still be reached.
Conclusion: an uncertain outlook
The Chinese economic slowdown is not a temporary hiccup but a structural challenge shaped by both external and internal forces. Verified data show that high tariffs and geopolitical tensions have slashed exports to the United States, while domestic demand remains weak amid a property‑sector slump. Beijing has responded with stimulus measures and is diversifying its trade partnerships, investing heavily in Brazil and deepening economic ties with India despite U.S. pressure. The effectiveness of these strategies – and their impact on global supply chains – will be critical to watch in the coming years.
