China and Duties. What was the real effect of the duties on traffic in large Chinese cities?
Beijing has remained very silent this week about the economic consequences of President Trump's escalating trade war.
By contrast, US media have reported that American companies have canceled or reduced orders for heavily tariffed Chinese goods, signaling a decline in shipments that will likely result in economic pain for Chinese suppliers.
We too briefly reported the news about a crisis in Chinese companies that previously lived by subcontracting to the USA, which disappeared overnight.
While official data lags by months and quarters, high-frequency data may soon emerge, particularly mobility data, which often serves as a real-time proxy for logistics and manufacturing activity.
Goldman's latest high-frequency indicators – covering consumption, mobility, production, investment and broader macro activity – are dated April 3 , coinciding with President Trump's "Liberation Day" which hit China and other global trading partners.
Escalation of US China tariffs
As of Friday, the U.S. effective tariff rate on Chinese goods is 145%, while China's is 125%. Notably, the high-frequency data from April 3 does not capture the latest wave of tariff-related disruptions.
Just before Liberation Day, the traffic congestion index in major Chinese cities was down 3% from a year earlier and remained below 2024 and 2019 levels for this time of year.
Traffic in Chinese cities
One can't help but wonder how congestion will be affected as Chinese suppliers face increasing pressure from canceled or reduced US shipments.
In a separate report, BloombergNEF presented similar congestion data for 15 major cities, showing a decrease in congestion levels for this time of year compared to 2024 and 2019 levels. Again, the data was not exposed to the post-Liberation Day surge in fares and order cancellations.
BloombergNEF data also shows that city-level road congestion in China fell by 6.3% in March compared to the same period a year earlier. The next update will likely show further slowdown.
Returning to Goldman's data, the report contains probably one of the most important graphs. Can consumer sentiment drop further?
The concern is that the next update of high-frequency congestion data could show further deterioration, as reports of order cancellations from Chinese factories continue to trickle in.
Trump's widespread tariffs will force Chinese factories that flood America with low-end products into a big dilemma: find new markets to exploit, with Europe already in crisis, move production out of China or close production lines – all options that appear negative in the short term.
In a week we will start to have post-duties data and therefore we will see what the true effect of this trade war is on Chinese production.
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The article China and Duties. What was the real effect of the Tariffs on traffic in large Chinese cities? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cina-e-dazi-quale-e-stato-leffetto-reale-dei-dazi-sul-traffico-nelle-grandi-citta-cinesi/ on Mon, 14 Apr 2025 07:00:25 +0000.