China’s economy is losing momentum just as trade tensions with the United States intensify. Third-quarter GDP expanded 4.8% year on year, down from 5.2% in the prior quarter, signaling a loss of steam across domestic demand. The slowdown comes as Beijing faces the delicate task of sustaining growth near its 5% annual target while preserving leverage in tariff negotiations with Washington.

The deceleration is not dramatic, but it exposes the fragility of China’s post-pandemic recovery. Industrial output rose 6.5% in September, buoyed by exporters rushing orders ahead of new U.S. tariffs, yet the domestic side remains weak. Retail sales grew only 3% year on year, a sharp contrast to the government’s hope for a consumption-driven…