China's manufacturing slump highlights tariff tensions
The Chinese economy experienced a decline in manufacturing activity in April 2025. The PMI for the industry fell to 49 points, marking the lowest result since December 2023. This decline is attributed to the new tariffs imposed by the USA.
After a promising start to this year, the Chinese economy faced difficulties as the second quarter began. According to a report from China's National Bureau of Statistics, the April PMI for the industry fell to 49 points, indicating a contraction in factory activity.
China slows in the industry. The effect of Trump's tariffs?
This is the lowest result since December 2023, a consequence of the tariffs imposed by the United States. Generally, a PMI value above 50 indicates growth in the sector, while a value below signifies shrinkage.
The impact of the trade tensions is felt not only in manufacturing but also in the services sector. The services PMI fell to 50.4 points in April, which is below economists' expectations of 50.7 points. The composite PMI, covering both industry and services, dropped to 50.2 points, also marking the lowest level since January.
The escalation of tariffs between China and the USA to the level of a trade war affects both of the world's leading economies. President Donald Trump imposed new tariffs, raising rates on Chinese imports to 145 percent. In response, China introduced retaliatory tariffs, increasing rates up to 125 percent.
