China Defies Tariff Headwinds with Resilient Q2 Growth

China’s economy maintained steady momentum in the second quarter, expanding by 1.1% from April to June and hitting an annualized growth rate of 5.2%, according to the National Bureau of Statistics. 

That keeps the country comfortably on course to meet its 2025 GDP growth target of approximately 5%, despite lingering tariff pressure from the United States. For the first half of the year, the economy grew 5.3% year-on-year, fueled by proactive macroeconomic policies and stronger-than-expected export performance.

Asian equities responded positively, with Hong Kong’s Hang Seng Index gaining 1.5% and Japan’s Nikkei 225 up 0.5%. Export data offered a bright spot, with outbound shipments rising 5.8% year-on-year in June. 

Much of that growth came from frontloading in the first quarter and a strategic pivot toward non-US trade partners, helping buffer against US duties that previously peaked at 145%. A temporary truce reached in May reduced US tariffs on Chinese goods to 30%, while Chinese tariffs on US imports were scaled back to 10%.

What Does This Mean for Me?

While industrial production remained resilient, economists warn that challenges could intensify in the second half. The tariff détente is set to expire on August 12 unless both nations agree to extend or renegotiate, leaving open the risk of renewed escalation. 

Still, for now, the data suggest that China’s economy remains more robust than many expected at the start of the year, showing that Beijing’s policy toolkit remains effective even under trade war stress.