By Adam Clark

Chinese officials have downplayed the effects of the trade war with the U.S. on its economy as it remains unclear whether the two governments are negotiating to lower tariffs.

Zhao Chenxin, vice head of the National Development and Reform Commission (NDRC), China's state planner, said that Beijing is confident of hitting its 5% economic growth target this year despite the U.S. and China imposing hefty levies on each other's exports, according to the official Xinhua News Agency.

It's a statement that could dampen hopes of lower trade barriers, after President Donald Trump said last week that his administration has been in touch with China "every day," although Chinese officials have denied any substantial contact on trade.

Treasury Secretary Bessent Not Sure of Trump-Xi Talks

Treasury Secretary Scott Bessent said Sunday he didn't know if Trump had spoken directly with Chinese President Xi Jinping, although he noted he had spoken with his own Chinese counterparts on topics such as financial stability and global economic early warnings at meetings last week.

"I don't know if President Trump has spoken with President Xi," Bessent said on ABC's This Week. "I know they have a very good relationship and a lot of respect for each other, but again, I think that the Chinese will see that this high tariff level is unsustainable for their business model."

Port Traffic Forecast to Collapse, 16 Million Chinese Jobs at Risk

In the absence of negotiations, Chinese exports to the U.S. are expected to plunge and put millions of jobs in danger, according to analysts.

Chinese goods exports to the U.S. are expected to contract by two-thirds this year if tariffs are maintained, according to a Goldman Sachs report.

"Our estimate suggests that 16 million [Chinese] jobs are involved in the production of goods exports to the U.S., almost one quarter of them in the wholesale and retail sales sector. Communication equipment, apparel and chemical product sectors are more vulnerable than other manufacturing sectors due to their high share in US-bound exports from China," the bank's analysts wrote.

Previous evidence shows that China's central bank has tended to cut policy rates when the labor market exhibited weakness, noted the Goldman Sachs team.

"If the current levels of tariffs remain for goods from China, it will cause a prolonged plunge in volume on China-U. S. routes," said S&P Global Ratings credit analyst Shanshan Yang in a research note on Monday. "This would affect port operations and force a rerouting of goods through other countries, such as those in Southeast Asia, assuming no other tariffs are imposed."

Write to Adam Clark at adam.clark@barrons.com

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April 28, 2025 06:05 ET (10:05 GMT)

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