China’s factories take a big blow as Trump’s tariffs bite

China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus.

China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus. The manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, the weakest reading since December 2023, according to data released by the National Bureau of Statistics (NBS) on Wednesday. A reading below 50 signals a contraction. Zhao Qinghe, a senior statistician at the NBS, said in a statement that the contraction in factory activity was due to “sharp changes in the external environment and other factors.” The acute decline underscores the damage that US President Donald Trump’s 145% tariffs on Chinese goods have already inflicted on the country’s export and manufacturing-reliant economy. Chinese manufacturers began to feel the brunt of the sky-high levies last month, as order cancellations and production cuts spread, raising fresh concerns over the country’s growth prospects. The April data marks a setback for Beijing, as top leaders strive to maintain a defiant and confident posture amid Trump’s trade war. The Chinese economy was already struggling with weak domestic consumption and a protracted property crisis. While activity in China’s services and construction sectors showed marginal expansion, with non-manufacturing PMI hitting the 50.4 level, the April data points to a downturn. A parallel measure of new export orders also dived to 44.7, the lowest since late 2022 when the country was still grappling with the Covid-19 pandemic.