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US Tariffs Hit Output In Chinese Factories

by Leadership News
3 months ago
in Foreign News
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A private-sector survey showed on Wednesday that China’s factory activity slowed at the start of the second quarter, with a sharp fall in new export orders and the resumption of employment declines.
The survey shows U.S. tariffs beginning to ripple through to China’s sprawling manufacturing industry as Beijing holds off on fresh stimulus, biding its time in what it expects to be a protracted trade war.

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The Caixin/S&P Global manufacturing PMI slipped to 50.4 in April from 51.2 in March, beating analysts’ expectations in a Reuters poll but marking the lowest reading since January. The 50-mark separates growth from contraction.

This result contrasts with China’s official PMI released on Wednesday, which showed factory activity falling faster than expected in April.

“The ripple effects of the ongoing China-U.S. tariff standoff will gradually be felt in the second and third quarters,” said Wang Zhe, economist at Caixin Insight Group.

“Policymakers should be well-prepared, with action taken sooner rather than later.”
According to the survey, the rate of contraction in new export orders was the sharpest since July 2023.

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This also led to a slower and only marginal rise in total new orders.
Output continued to expand, though at a slower pace, as factories worked through new and existing orders. Due to trade uncertainty, firms lowered their inventories, and business optimism slipped to the third-lowest level since this series began in April 2012.

Trade disruptions and supply constraints resulted in a slight lengthening of supplier lead times in April—greater competition among vendors amid subdued demand for inputs led to another drop in average input costs.

After rising in March, employment in the manufacturing sector declined in April due to resignations and company restructuring plans resulting from downsizing and cost-cutting efforts.


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