On Monday, Taiwan’s National Security Bureau (NSB) released a report warning that U.S. tariffs are expected to exacerbate China’s economic and social risks. According to the report, China’s exports to the United States fell by US$69.6 billion after Washington announced reciprocal tariffs in April. The additional 40% transshipment tariff imposed by the U.S. in August will further restrict China’s ability to bypass these duties by reexporting goods through third countries.

The NSB said China’s investment growth stood at just 0.5% between April and September — the lowest level for that period since 2020. Declines in private and real estate investment point to weak domestic demand. Citing statistics from the international NGO Freedom House, the report also noted a 63% rise in protests and petitioning incidents across China from January to September, largely driven by unpaid wages and unfinished housing projects.

Official data shows China’s youth unemployment rate reached 18.9% in August, the highest since the government revised its statistical methodology in December 2023. Meanwhile, a new policy requiring both businesses and employees to pay into the social security system starting September 1 has prompted many small and medium-sized enterprises to cut salaries or lay off workers.

The NSB observed that China’s September 3 military parade was intended to divert public attention from economic stagnation and corruption, strengthen ties with authoritarian allies, and lay the groundwork for President Xi Jinping’s (習近平) fourth term. The report concluded that U.S. President Donald Trump’s “America First” policy is reshaping global politics and economics, particularly by targeting China’s transshipment practices.