The ongoing trade conflict with the United States is taking a visible toll on China’s economy, as rising American tariffs have begun to disrupt export orders and industrial output.
China’s manufacturing sector has been hit hard, with new data showing a steep decline in export demand—particularly in April. According to surveys released Wednesday by the National Bureau of Statistics, the index measuring new export orders dropped to its lowest level since the COVID-19 outbreak in 2022.
Additionally, the overall health of China’s manufacturing industry has deteriorated, with the official Purchasing Managers’ Index (PMI) falling to 49, signaling a contraction. This marks the weakest reading since December 2022.
New export orders also plunged, matching the same low point recorded at the end of 2022.
Economists at Capital Economics warned that while the PMI figures may exaggerate the immediate effects of tariffs due to widespread pessimism, they still reflect a real decline in external demand—and increased pressure on China’s broader economy.
“Even with stepped-up fiscal support from the government, it likely won’t be enough to counter the drag. We now forecast GDP growth of just 3.5% this year,” noted economist Zichun Huang.
These economic setbacks are mounting pressure on Chinese officials to ramp up stimulus efforts and consider negotiations with the U.S. However, Beijing has so far adopted a defiant tone.
The developments underscore the deepening impact of former President Trump’s aggressive tariff policy, which is beginning to affect the foundations of China’s economic engine. As challenges grow, Chinese President Xi Jinping faces increasing calls to strike a deal with Trump—but Beijing continues to project strength in the face of what it views as U.S. economic aggression.
A separate indicator measuring new export orders fell even further to 44.7 in April, its weakest level since December 2022.
