Despite tariffs covering 100% of U.S. exports to China and 88.8% of Chinese exports to the U.S., China’s economy has outperformed forecasts, with real GDP growth of 4.5% in the third quarter, compared with 2.5% and 2.2% in the U.S. during the first and second quarters. China’s industrial production rose 5.5% year over year in September, while retail sales also exceeded expectations. China has simultaneously tightened its fiscal policy, with public revenue rising 1.4% and spending falling 3.5% in the first nine months, narrowing its augmented fiscal deficit from 11% to 9.4% of GDP between December 2025 and September 2026. The U.S. nevertheless remains the world’s largest economy and has a GDP per capita exceeding $95,000, compared with $15,370 in China. Tariffs remain elevated at 31.9% on Chinese exports and 35.2% on Chinese imports into the U.S., but Chinese exports surged 36.3% year over year in September.
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