\n US President Donald Trump\u2019s tariff offensive<\/a> \u2013 which at one point reached 145% on Chinese imports \u2013 has upended what is arguably the world\u2019s most consequential bilateral trade relationship. Under a May truce<\/a> reached in Geneva\ufeff that scaled back the triple-digit tariffs, Beijing has less than a month, until August 12, to secure a permanent deal with Washington.\n <\/p>\n \n For China\u2019s export-reliant economy, much hinges on the tariff rate ultimately agreed upon. Even a double-digit levy would carry profound and lasting implications for Chinese manufacturers \u2013 a key pillar of the country\u2019s economic engine.\n <\/p>\n \n Domestically, the Chinese economy continues to be weighed down by a host of structural challenges, including a prolonged property crisis, soaring youth unemployment, sluggish consumption and persistent deflation.\n <\/p>\n \n In June, consumer spending fell short of expectations while industrial production exceeded them, according to data released by the NBS Tuesday. Retail sales slowed to 4.8% from the same month last year, compared with 6.4% growth in May. Meanwhile, industrial output expanded 6.8% compared with June last year, an increase from 5.8% last month, likely due to the trade truce.\n <\/p>\n \n Nick Marro, principal economist for Asia at the Economist Intelligence Unit, told CNN that while the trade war has dragged on market sentiment, it hasn\u2019t emerged as the massive shock to Chinese economic performance that investors initially feared back in April.\n <\/p>\n \n With weaknesses in the domestic economy, such as weak consumer confidence and persistent stress in the property sector, however, he expects China to barely undershoot its annual target for this year.\n <\/p>\n \n But Marro also cautioned that there is a mismatch between what the GDP figure says and what companies and households are seeing on the ground.\n <\/p>\n \n \u201cFor many, this doesn\u2019t \u2018feel\u2019 like an economy growing at around 5% \u2013 That sentiment factor has implications for how sustainable future retail spending is, as well as considerations for businesses about future investment expansions, as well as hiring and wage growth,\u201d he said.\n <\/p>\n \n Despite growth in the first half of the year exceeding the 5% target, economists warned that existing obstacles could weigh on exports and slow economic momentum in the months ahead.\n <\/p>\n \n Zichun Huang, an economist at Capital Economics, wrote in a Tuesday research note that the economic outlook for the rest of the year remains \u201cchallenging.\u201d\n <\/p>\n \n \u201cWith tariffs set to remain high, fiscal ammunition being depleted and structural headwinds persisting, growth is likely to slow further over the second half,\u201d he said.\n <\/p>\n \n In June, China\u2019s manufacturers capitalized on the trade truce with the US and diversified their supply routes to achieve a 5.8% growth in overall export compared to the same month in the previous year, beating analysts\u2019 forecast, according to trade data<\/a> released on Monday by China\u2019s General Administration of Customs. At the same time, imports edged up 1.1%, marking the first monthly increase in inbound shipments since February.\n <\/p>\n \n Notably, exports of rare earth jumped 32% in June from the same month a year ago, signaling positive progress as China agreed to approve the flow of the critical elements<\/a> essential in everything from electronic products to vehicles and fighter jets following talks in London with the US last month.\n <\/p>\n \n Outbound shipments to the US in June declined 16.1% from the same month last year due to persistent trade frictions. But exports last month grew 32% month-on-month following the Geneva agreement. For the first half of the year, exports to the US dropped 9.9% from a year earlier, with second-quarter shipments plummeting nearly 21%.\n <\/p>\n \n Southeast Asia in particular has emerged as a major export destination in place of the US. Exports to the 10-country Association of Southeast Asian Nations (ASEAN) surged by over 18% compared with June last year. China has increasingly turned to neighboring economies not only as end markets but also as logistical intermediaries, routing goods through countries like Vietnam to circumvent US tariffs \u2014 a strategy the Trump Administration has vowed to crack down.\n <\/p>\n \n As part of a trade framework the US reached with Vietnam, Trump said he will impose a 40% duty on transshipped imports via Vietnam. Chinese exports to Vietnam rose more than 25% last month compared with June last year.\n <\/p>\n![\"Customers](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/gettyimages-2223590476.jpg\")
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