China could weather tougher EU trade restrictions

Even a sharp escalation in EU trade restrictions would have only a small impact on China’s economy. We estimate that an additional 20%-pt tariff on Chinese imports across strategically important sectors would reduce China’s GDP by just 0.2-0.4%. The scope for escalation is also constrained by EU reliance on Chinese supplies of critical minerals and green technologies, along with divisions between member states.

This report is part of our China Shock 2.0 series. Explore the latest publications on this dedicated page.