China's Manufacturing Sector Struggles Under Weight of Trump's Tariffs

Manufacturing PMI Falls Precipitously

China's factories posted their sharpest fall in over a year this April, as US President Donald Trump's sweeping 145% tariffs began to exact a telling price on the country's manufacturing sector. The manufacturing Purchasing Managers' Index (PMI) fell to 49.0—its lowest since December 2023, the National Bureau of Statistics (NBS) reported. A PMI reading below 50 indicates contraction, and it is a trend that is worrying the second-largest world economy.

Zhao Qinghe, a senior NBS statistician, attributed the slowdown to "major changes in the external environment," that is to say trade tensions and softened demand.

Export-Driven Factories Struggle

The tariffs have led to widespread order cancellations and factory production declines. Export-oriented factories are most vulnerable, with several halting production owing to fears of future shipments to the United States.

The drop in new export orders—now at 44.7, the lowest since 2022 during the COVID-19 pandemic—illustrates the scale of the impact. While services and construction sectors showed modest expansion (non-manufacturing PMI at 50.4), they have not been enough to offset manufacturing losses.

Analysts Warn of Deepening Trouble

Robin Xing, Morgan Stanley's top China economist, warned that the worst effects of the tariffs are being experienced now. "Many exporters have suspended US operations due to the uncertain tariff environment," Xing said in a note. He added that China's response so far has been reactive and supply-side focused.

Experts believe that without more general demand-led stimulus or decisive fiscal action, the economic picture would worsen in the second half of the year.

Beijing Considers Broader Stimulus

In response to the slowdown in manufacturing, Chinese officials are considering more. While they have introduced some of these measures, such as easing credit terms and stimulating domestic consumption, a broad national stimulus program has not yet been launched.

National Development and Reform Commission spokesman Zhao Chenxin said in a Monday news conference that China has "sufficient policy buffers" and will accelerate the speed of delivery of economic support to counter the rising external pressures.

Diplomatic Tensions Escalate

At diplomatic levels, tension continues to build. On a BRICS meeting in Rio de Janeiro, Chinese Foreign Minister Wang Yi would not tolerate the suggestion of tariff negotiations, dismissing instead the United States for "bullying" using trade. A video released by China's foreign ministry was to repeat those words, inviting the international community to resist American trade aggression.

Trump Stands Firm on Tariff Strategy

The former US President Donald Trump defended himself in a television interview, saying the tariffs were required and China would "struggle" to keep trading with the United States under current conditions. "They deserve it," Trump doubled down on his aggressive trade policy, repeating.

Outlook: More Pain Ahead Without Bold Action

While China's economic planners grapple with homegrown problems and foreign shocks, economists widely anticipate that an extended stimulus package would be unveiled in the near future. Without swift and resourceful intervention, the specter of prolonged industrial deceleration and declining investor confidence weighs heavily.