China's manufacturing drops in April as US trade war impact starts to show

China’s manufacturing activity declined in April after showing signs of recovery in March, according to government data released on Wednesday. The slump comes amid rising trade tensions with the United States, which recently imposed heavy tariffs on Chinese goods.

The Purchasing Managers’ Index (PMI) — an important indicator of factory activity — dropped to 49 in April, down from 50.5 in March, which had been the highest reading in 12 months. The April figure was also lower than the 49.7 expected by a Bloomberg survey.

According to China’s National Bureau of Statistics (NBS), the drop was linked to both a strong performance the previous month and increased trade pressure. “In April, affected by factors such as a high base from earlier rapid manufacturing growth and a sharp shift in the external environment, the manufacturing PMI fell,” said NBS statistician Zhao Qinghe, as quoted by AFP.


This fall in manufacturing comes just weeks after the United States imposed tariffs of up to 145% on many Chinese products. Beijing responded with 125% tariffs on several US imports.

Although Chinese exports had jumped by over 12% in March as firms rushed to ship goods before the new tariffs kicked in, domestic issues remain. The country is still recovering from the Covid-19 pandemic, struggling with low consumer demand and a long-running property sector crisis.

To address these challenges, Chinese authorities have introduced stimulus measures, including rate cuts and relaxed home-buying rules. They’ve also set a goal to create 12 million new urban jobs this year and maintain 5% economic growth, matching last year’s target.