Trade tensions hit Chinese industry: PMI drops to 49 points
The Chinese economy experienced a decline in manufacturing activity in April 2025. The PMI for the industrial sector fell to 49 points, marking the lowest result since December 2023. This decline is attributed to the new tariffs imposed by the United States.
After a promising start to the year, the Chinese economy started facing challenges with the onset of the second quarter. A report from the Chinese National Bureau of Statistics (NBS) indicates that in April, the PMI for the industrial sector fell to 49 points, which signifies a contraction in factory activity.
China slows down in industry. Effect of Trump's tariffs?
This is the lowest result since December 2023 and is attributed to the tariffs imposed by the United States. A PMI value above 50 points indicates sector expansion, while a value below 50 signifies that the industry is contracting.
Not only is the manufacturing sector feeling the effects of trade tensions, but the PMI for services also fell, reaching 50.4 points in April. This outcome is below economists' expectations, who had predicted 50.7 points. The composite PMI, which includes both manufacturing and services, dropped to 50.2 points, the lowest level since January.
The escalation of tariffs between China and the United States, reaching the level of a trade war, is impacting both of the world's leading economies. President Donald Trump imposed new tariffs, raising rates on Chinese imports to 145 percent. In retaliation, China implemented tariffs of up to 125 percent.
