Goldman Sachs Cuts China GDP Growth Forecasts Citing Tariff Impact

• U.S. investment bank Goldman Sachs lowered its forecasts for China's GDP growth to 4.0% in 2025 and 3.5% in 2026 in a report published on Thursday, from 4.5% and 4.0% previously, citing the effects of tariffs.
• Goldman Sachs revised the world's No. 2 economy and second biggest provider of U.S. imports after U.S. President Donald Trump hiked the tariff on Chinese imports to 145.0% from the 104.0% level that kicked in on Wednesday.
• Although additional tariff increases are likely to have a "diminishing marginal impact", the substantial rise in US tariffs on China is expected to significantly weigh on the Chinese economy and labor market, Goldman said.
• We anticipate the Chinese government will further intensify policy easing, projecting 60bp of policy rate cuts (vs. 40bp previously). However, the report added that "even these significant easing measures are unlikely to fully offset the negative effects of the tariffs.

(Source: Reuters)