China

China's industrial profits reached 3.948 trillion yuan in the first half of 2026, up 18.7% year on year, but the headline figure obscures a sharp divide: electronics and integrated-circuit manufacturing accounted for the bulk of gains while automobile profits fell 19.5% and vehicle sales declined for a ninth straight month in June. The NBS itself flagged insufficient domestic demand and cash-flow pressure, meaning the improvement reflects export-linked and AI-driven production rather than a broad consumer recovery.

USTR's new Section 301 tariffs, effective July 24, 2026, cover most imports from 60 economies found to lack adequate forced-labor prohibitions, with China assigned a 12.5% rate versus 10% for 17 others. For Chinese goods already carrying legacy Section 301 duties of 25% to 100%, the additional 12.5% compounds existing exposure, though the precise landed rate depends on HTS classification and economy-specific exemption annexes. China's Commerce Ministry called for withdrawal but announced no new retaliation, and no WTO dispute filing has been confirmed.