China's Manufacturing Hits 16-Month Low as U.S. Imposes 145% Tariffs, New Export Orders Plunge
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China's manufacturing activity contracted in April, with the official purchasing managers' index (PMI) dropping to a 16-month low of 49.0 from 50.5 in March, marking the lowest level since December 2023. This contraction was attributed to the impact of escalating trade tariffs imposed by the U.S., which have begun to affect export orders and overall factory activity.
The Caixin/S&P Global manufacturing PMI, which provides a more private sector-focused view, also declined to 50.4 from 51.2 in the previous month, indicating a modest expansion but still reflecting the pressures from the trade war. The non-manufacturing PMI, encompassing services and construction, fell slightly to 50.4 from 50.8, suggesting a slowdown in these sectors as well. The composite PMI dropped to 50.2 from 51.4, signaling slower expansion across the economy.
The decline in manufacturing activity was accompanied by a sharp drop in new export orders, reaching the lowest level since the Covid-19 shutdowns in 2022. This indicates the significant toll that U.S. tariffs, which have risen to 145% on some Chinese goods, are taking on China's export-driven economy. Cargo shipments are reported to be down by up to 60%, and if exports to the U.S. drop by 50%, it could lead to 570,000 immediate job losses in China, with the potential for up to 1,580,000 job losses if the impact spreads across the economy. Despite these challenges, China's economy grew by 5.4% in the first quarter, driven by a rush to ship goods before the tariffs took effect.
New: US manufacturing contracted in April, with production seeing its fastest contraction since 2020. The Manufacturing Purchasing Managers Index registered a reading of 48.7 in April, down slightly from March's 49, and the lowest level since November. A reading above 50 equals
US ISM manufacturing business index, 4/48.7 low level for the first time in 5 months due to tariff costs https://t.co/IjIrx7csG7 https://t.co/IjIrx7csG7
