China’s economy expanded at a 5% annual rate in 2025, supported by strong export performance despite new U.S. tariffs imposed under President Donald Trump, government data released Monday showed.

Growth, however, slowed to 4.5% in the final quarter of the year, marking the weakest quarterly expansion since late 2022, when China began lifting strict COVID-19 restrictions. The world’s second-largest economy had grown at a 4.8% annual rate in the previous quarter.

The report comes as Trump’s latest tariff measures raise the risk of renewed transatlantic trade tensions. A French official confirmed  on Monday that President Emmanuel Macron plans to seek activation of the European Union’s anti-coercion instrument if new U.S. tariffs are imposed.

The mechanism — often referred to as the EU’s “trade bazooka” — would allow the bloc to impose sweeping countermeasures on U.S. goods and services, including restrictions on American investment in Europe, limits on access to public procurement contracts, and constraints on intellectual property protections.

China’s leadership has been attempting to revive stronger growth following a prolonged property sector downturn and lingering disruptions from the pandemic. Annual expansion in 2025 aligned with Beijing’s official target of “around 5%.”

Exports played a central role in sustaining growth, offsetting weak domestic consumer spending and sluggish business investment. The export strength helped drive a record trade surplus of $1.2 trillion.

“The key question is how long this engine of growth can remain the primary driver,” said Lynn Song, chief economist for Greater China at ING.

Chinese exports to the United States declined after Trump returned to office last year and raised tariffs, but losses were balanced by increased shipments to other global markets. However, surging Chinese imports abroad are prompting some governments to introduce protective measures for local industries, including higher import duties.

“Should more economies ramp up tariffs on China, as Mexico has done and the EU has signaled it may do, the squeeze will eventually tighten,” Song said.