China Rolls Out New Consumer Subsidies as Trump Tariff Threats Loom

China is stepping up efforts to support its economy ahead of Donald Trump’s upcoming return to the White House and his threats to impose steep tariffs on Chinese goods. Bloomberg reported that Beijing is expanding an existing subsidy program and increasing funding for industrial and agricultural equipment upgrades to help shore up domestic demand as exports face pressure.

Under a plan approved and released by the Finance Ministry, consumers this year will get a 15% subsidy on new smartphones, tablets and smartwatches costing less than 6,000 yuan, or $818. The support is capped at 1,500 yuan per person annually, for no more than one item in each category. The government is also widening the range of subsidized household appliances to 12 types from eight, adding dishwashers, water purifiers, microwaves and electric rice cookers. Officials said the appliance program drove 240 billion yuan in sales in 2024.

The package also renews subsidies for trade-ins of electric and hybrid cars. That program, launched last year, helped purchase more than 3.7 million vehicles. Beijing has made boosting consumption a top priority this year as it tries to combat deflation and restore confidence among households and businesses. Consumer confidence has fallen to a record low of 85.7 points.

At a meeting last month, senior officials pledged to “act decisively to increase consumption.” The move comes as export growth is expected to slow, especially if trade tensions with the United States escalate during Trump’s second term. In November, Chinese exports to the U.S. totaled $47.3 billion, more than any other destination, followed by Hong Kong, Vietnam and Japan.

The new measures followed disappointing economic data, including November retail sales that rose 3% year on year, below forecasts for 4.3%. Last week, 48 million public-sector workers got their first pay raise since 2015. Analysts say consumption will not recover without a stronger property market. To finance local subsidy distribution, China will issue special long-term government bonds and has already allocated 81 billion yuan for implementation, compared with 300 billion yuan in total funding last year.