China’s Growth Leaves Trump’s MAGA USA in the Dust
Photograph Source: Dan Scavino – Public Domain
The International Monetary Fund just released its growth projections for 2025, as well as the next five years. It’s not a very good picture for Donald Trump’s economic plans. The I.M.F. projects the US economy will grow just 1.8 percent from 2024 to 2025. It looks even worse for next year, with growth projected to slow further to 1.7 percent.
It’s also important to remember that these are full year averages, so most of the growth from 2024 to 2025 was actually in the second half of 2024, when Biden was in the White House and the US economy grew at a 2.8 percent annual rate.
The story looks even worse if we compare our projected growth to the growth projected for Donald Trump’s arch nemesis, China. The I.M.F. is projecting that China will grow 4.0 percent from 2024 to 2025 and again from 2025 to 2026.
This difference is even more striking if we look at the absolute amount each country is projected to add to its GDP over this two-year period. (These numbers use purchasing power parity measures of GDP, which applies a common set of prices to the goods and services produced in both countries.)
China is projected to add almost $5.1 trillion to its GDP between 2024 and 2026. The United States is projected to add just over $2.5 trillion. China’s GDP first passedUS GDP in 2016, but it has added to the gap rapidly in the intervening years so that its economy is now more than 30 percent larger. It looks like Donald Trump’s trade policies will increase the gap even more rapidly.
To be clear, China getting wealthier is not a bad thing for the United States and the world. It has made trillions of dollars of goods available at a lower cost than they otherwise would be, raising living standards of people around the world. We certainly could have structured our trade with China differently so that our imports did not have as negative effect on the working class here, but that was our policy choice.
But there is no reason for us to view rapid growth going forward in China negatively, especially since a big part of it is a conversion to a green economy with EVs and clean energy. We should be unhappy that the Trump administration’s policies are preventing us from keeping pace.
This first appeared on Dean Baker’s Beat the Press blog.
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