China’s Economy was Sputtering and Facing major Headwinds before Trump’s Trade War: When President Trump declared “Liberation Day” on April 2, 2025, imposing what amounted to an embargo against Chinese good, China was hardly a paragon of robust economic health. To be sure, in the wake of its lackluster post-Covid economic recovery, the first quarter of this year was marked by a few green shoots. These included a rise in corporate profits and increase in retail sales. However, even here the picture was rather mixed. At the same time, the housing market remains in the red, while households face uncertainty in employment and anemic wage growth. These problems, in turn, are reflected in ongoing stagnant or falling prices and the looming threat of a deflationary spiral. First, the green shoots. According to Chinese Government official data, profits at Chinese industrial firms rose by 0.8%during the first quarter of 2025 . ...