• China's GDP grew 5.4% in Q1 2025, surpassing the 5.1% forecast by analysts.
• The growth was driven by exporters rushing shipments ahead of U.S. tariffs.
• Policymakers brace for potential impacts as U.S. tariffs increase to 145%.
• Retail sales and industrial output showed significant growth despite trade war pressures.
• The outlook for the remainder of the year is less optimistic due to the threat of renewed tariffs.

China's economy recorded a 5.4% GDP growth in the first quarter of 2025, exceeding expectations and marking a resilient start to the year amidst escalating trade tensions with the U.S. Official statistics indicated this growth, which surpassed the 5.1% forecast by analysts, reflects substantial efforts by export-oriented industries to expedite shipments ahead of impending tariffs imposed by the U.S. according to Reuters.

The increase in economic output was bolstered by a surge in industrial production, which rose 6.5%, and robust retail sales that climbed 4.6% year-on-year in March. Analysts attribute this performance partly to a proactive response from manufacturers and retailers to preempt the effects of U.S. tariffs that reached as high as 145%, exerting significant upward pressure on pricing and trade dynamics, reports The New York Times.

Despite the positive quarterly results, economists warn of a potential slowdown in the coming months due to the heightened tariffs which threaten to undermine China’s export-driven growth model. The export surge in March has been described as a temporary spike, resulting from businesses attempting to ship goods before the tariffs took effect according to Channel News Asia.

President Donald Trump’s administration has initiated a series of tariffs targeting Chinese goods, leading to reciprocal duties imposed by Beijing on U.S. imports. This trade war has raised concerns among markets about a potential global economic recession, with economists fearing that the elevated tariff rates could lead to a drop in orders and production capacity, warns Newsweek.

Looking ahead, analysts have revised China's GDP growth forecast downward to approximately 3.4% for 2025, reflecting the anticipated negative impacts of the ongoing trade war and mounting pressure on the economy. The government has indicated the necessity for more aggressive monetary and fiscal policies to stimulate growth amidst a complex economic environment, as highlighted by India Times.

While the immediate quarter has shown resilience, the overall sentiment among experts is cautious, suggesting a challenging path ahead as China's economy navigates the turbulent waters of international trade and domestic consumption challenges according to TRT Global.