China’s Manufacturing PMI Plunges in April as U.S. Tariffs Hit Hard – Recession Fears Grow | DailyForex.pk

China’s factory sector contracted sharply in April 2025, signaling renewed economic pressure amid intensifying trade tensions with the United States. According to official data released Wednesday, China’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 49.0 — well below expectations of 49.7 and significantly lower than March’s 50.5 reading. A PMI below 50 indicates contraction, marking a concerning return to slowdown after two months of recovery.

The downturn comes in response to aggressive U.S. trade policies, as President Donald Trump imposed steep 145% tariffs on Chinese imports, prompting Beijing to retaliate with 125% duties on American goods. This escalating trade war has severely hit China’s export orders, with manufacturers reporting a widespread decline in new business.

Non-manufacturing activity also weakened, with the services PMI coming in at 50.4, slightly missing forecasts. The composite PMI slipped to 50.2 from 51.4, barely staying in expansion territory — highlighting the broad impact of trade headwinds on China’s economy.

Despite government stimulus measures earlier in the year, April’s data paints a grim picture for Q2 2025, pressuring policymakers to accelerate support. While President Trump recently claimed progress in trade talks, China’s foreign ministry has denied any ongoing negotiations, adding to market uncertainty.

Meanwhile, a private Caixin survey offered a slightly better outlook. The Caixin Manufacturing PMI stood at 50.4, outperforming expectations of 49.8, though it too dropped from March’s 51.2. The survey revealed a sharp decline in overseas orders and increasing job cuts in smaller, private sector firms. Analysts warn that unless swift policy action is taken, the full impact of tariffs could deepen in the coming quarters.

Key Takeaways for Traders:

• Official China Manufacturing PMI drops to 49.0 in April
• Export orders slump due to U.S. tariffs, weighing on economic outlook
• Composite PMI at 50.2 signals near-stagnant growth
• Caixin PMI stays in expansion but shows weakening momentum
• Market eyes further stimulus from Beijing as trade tensions escalate

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