Trump Tariffs Impact China Economy: Export Decline and Market Analysis

This analysis is based on the Fox Business report [1] published on November 10, 2025, featuring Gatestone Institute senior fellow Gordon Chang discussing the impact of President Donald Trump’s tariffs on China’s economy. The media appearance coincides with actual economic data revealing significant deterioration in China’s export performance.

The tariff impact has created a measurable economic shock, with China’s exports experiencing their worst downturn since February 2025, falling 1.1% in October compared to September’s 8.3% growth [2]. This represents a dramatic reversal from previous performance and missed analyst forecasts of 3.0% expansion. The most severe impact is visible in U.S.-bound trade, where exports tumbled 25.17% year-on-year in October [2].

Market data reveals sector-specific impacts, with Chinese technology stocks showing particular weakness. Alibaba (BABA) is down 2.46% and JD.com (JD) declined 0.38% in current trading, while the broader technology sector underperformed with a -0.87% decline [0]. However, some divergence exists, with healthcare (+1.12%) and financial services (+0.79%) showing resilience [0].

The current situation reflects complex economic warfare, with U.S.-bound Chinese goods facing average tariff rates around 45%, exceeding the 35% threshold that economists estimate wipes out Chinese manufacturers’ profit margins [2]. Despite the export decline, China’s trade surplus with the U.S. actually increased to $24.76 billion in October from $22.82 billion in September [2], suggesting structural trade imbalances persist.

The timing is particularly significant as it follows a period of front-loading by Chinese manufacturers rushing shipments ahead of anticipated tariff increases. A tentative truce was reached on November 1, 2025, with both countries agreeing to trim tariffs and pause other measures for one year [2]. China has accelerated market diversification efforts, with shipments to the EU growing 0.9% and to Southeast Asia increasing 11.0% [2].

Analysts express concern about the near-term outlook, with one noting “It’s going to be much tougher for China in the fourth quarter, which means it’s going to be tougher in the first half of 2026 as well” [2]. The loss of U.S. market access has cut China’s export growth by approximately 2 percentage points, or roughly 0.3% of GDP [2].

Users should be aware that several factors could significantly impact market stability:

1. Escalation Risk:
   Trade tensions could escalate beyond current levels, particularly if political negotiations falter
2. Economic Decoupling:
   The long-term trend of reducing economic interdependence between the U.S. and China may accelerate
3. Domestic Chinese Challenges:
   Property market downturn and weak domestic consumption compound export pressures

1. Market Diversification:
   China’s push toward alternative export markets may create new opportunities in Southeast Asia and EU regions
2. Sector Rotation:
   While technology faces headwinds, healthcare and financial services show strength [0]
3. Policy Relief:
   The one-year tariff truce may provide temporary market stabilization

Decision-makers should track policy developments, monthly trade figures, PMI data, corporate earnings of major exporters, and RMB/USD exchange rate movements.

The tariff implementation has created measurable economic disruption, with China’s export sector experiencing significant contraction. The average 45% tariff rate on U.S.-bound goods exceeds profit margin thresholds for many Chinese manufacturers [2]. While a one-year truce provides temporary relief, structural trade tensions appear likely to persist.

Market performance shows clear sector divergence, with technology stocks under pressure while healthcare and financial services demonstrate resilience [0]. The Chinese yuan has edged lower against the dollar, registering its first weekly decline in a month [2], adding currency risk to the economic challenges.

China’s strategic response includes accelerated market diversification, with notable growth in exports to Southeast Asia (+11.0%) and modest gains to the EU (+0.9%) [2]. However, the near-term outlook remains challenging, with analysts projecting continued difficulties through Q4 2025 and into H1 2026 [2].