China's economy is being slammed by the global tariff war.

Here is a sampling of recent headlines from the last month indicating China's economy is facing strong headwinds:

• China factory activity stumbles as export orders dry up
• China's exports suffer worst downturn since February
• Weak Data Raises Concerns for China's Economy
• China steel output slumps as iron ore imports head for record
• China manufacturing is slumping despite boost from US trade truce
• China's services growth slips to five-month low in November
• China's Trade Surplus Hits Record $1tn Despite Trump's Tariff
• Beijing Data Blackout Raising Alarm Bells About China's Economy

If you just went by these headlines, you might think that China's economy is merely slowing. Worse, you might think China's government is able to fully hide how its economy is performaing. But it's not just these reports that reveal the state of China's economy.

Because China is, by a very wide margin, the world's biggest producer of carbon dioxide emissions, the rate at which CO₂ accumulates in the Earth's atmosphere provides direct evidence of the relative health of the nation's economy. Data collected at the remote Mauna Loa Observatory indicates the trailing twelve month average rate at which carbon dioxide accumulates in the Earth's atmosphere is rapidly falling, from which we can infer economic growth is having trouble getting traction within the country.

The following chart shows how this measure has evolved from January 2000 through November 2025:

Atmospheric carbon dioxide concentration data lags behind changes in CO₂ output, taking several weeks to diffuse into the Earth's air after being emitted. The peak in January 2025 coincides with Chinese emissions peaking in December 2024, which itself coincides with efforts by China's exporters to crank up production to beat the clock on new U.S. trade tariffs going into effect in 2025. January 2025 saw the Biden administration final tariff increases go into effect, while President Trump's new tariffs were put into effect in April 2025. Not uncoincidentally, there's a short spike upward in May 2025 that would correspond with a surge by producers in China to beat the clock on April 2025's tariffs.

Since the atmosphere's pace of CO₂ accumulation peaked at 3.57 ppm in January 2025, it has fallen by 0.71 ppm to 2.87 ppm through November 2025. With an estimated world population of 8.005 billion people, that drop represents roughly a reduction of 5.5 billion metric tonnes of carbon dioxide emissions. It also represents an estimated $23.6 trillion decline in the world's GDP during the last ten months.

China's reduced output of carbon dioxide emissions, primarily stemming from its involuntarily reduced industrial output, represents a large share of that overall decline. If not for the impact of the global tariff war, which still threatens to hit China's industrial economy with even more tariffs, it is highly unlikely a decline of this magnitude would have occurred in the absence of a major global recession.

References

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Online Data]. Updated 5 December 2025.

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