Chinaʼs manufacturing activity contracted at its fastest pace in 16 months in April 2025. Tough US tariffs have dealt a serious blow to the manufacturing sector, as Beijing looks for new ways to stimulate the economy.
CNN writes about this.
The manufacturing purchasing managers index (PMI) fell to 49.0 points, the lowest since December 2023. Zhao Qinghe, a senior statistician at the National Bureau of Statistics of China, said the decline in manufacturing activity was due to “a sharp change in the external environment and other factors”.
This underscores the damage the 145% US tariffs have done to Chinaʼs export- and industry-dependent economy. Chinese manufacturers have already begun to feel the full impact of the tariffs this month, with massive order cancellations and production cuts.
The April figures were a major blow to Beijing, which is trying to maintain a confident and unwavering tone amid the trade war unleashed by the United States. Chinaʼs economy has long struggled with weak domestic consumption and a protracted housing crisis.
While Chinaʼs services and construction sectors showed modest growth — the PMI for these sectors reached 50.4 — the overall picture points to an economic slowdown. A parallel indicator of new export orders fell to 44.7 — the lowest level since late 2022, when the country was still struggling with the effects of the Covid-19 pandemic.
Robin Xin, chief China economist at Morgan Stanley, noted that the decline in Chinaʼs PMI is the result of tariff policies that are weakening external demand.
“In our opinion, the impact of tariffs will be most acute this quarter, as many exporters have stopped production and shipments to the US due to increased uncertainty,” Xin noted.
Analysts expect the Chinese government to step up fiscal and monetary stimulus measures in the coming months to support growth.
To overcome economic difficulties, China has gradually introduced soft support measures — for example, it has made it easier for companies in crisis to access credit and is trying to encourage people to buy more. However, the government has not yet launched a large-scale economic stimulus program for the whole country. Instead, Beijing has promised targeted support — to help where it is most needed: in the sphere of consumption and exports. The authorities have also hinted that new solutions for the economy may appear in the near future.
During a government press conference, Zhao Chenxing, deputy chairman of the National Development and Reform Commission, said that Beijing has “sufficient reserve of policy tools” to respond to economic needs and will accelerate the implementation of already announced measures.
On the same day, Chinese Foreign Minister Wang Yi rejected the idea of talks with Washington to end the tariff war, saying that concessions in the face of American threats would only "untie the bully".
Meanwhile, US President Donald Trump said that China "deserved" the 145 percent tariffs imposed on it, and expressed the opinion that Beijing would bear the costs.
"China will probably swallow these tariffs. But at 145%, they canʼt actually do business with the United States," Trump said.
- On April 2, the US President Donald Trump informed that he would impose tariffs on goods from other countries. The new tariffs will apply to more than 180 countries and territories (not including Russia, North Korea, Cuba and Belarus, which are already under sanctions). A 10% tariff was imposed on Ukraine.
- As early as April 9, Trump postponed tariffs on all but China, which received the highest tariffs of 145%, while most countries are subject to a base rate of 10%. And in mid-April, Trump threatened to impose tariffs of 245%.
- Chinaʼs Ministry of Finance reported on April 11 that it would raise tariffs on all American goods from 84% to 125%.
- The Wall Street Journal wrote on April 24 that Washington is considering reducing tariffs on goods from China to 50-65%.
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