The US-China trade war has severely impacted Chinese factories and businesses, with manufacturing activity contracting at its fastest pace in over a year. In April 2025, China’s official manufacturing Purchasing Managers’ Index (PMI) dropped to 49.0, indicating a contraction and marking the sharpest decline since December 2023. This downturn is primarily attributed to the steep US tariffs, which have raised import duties on Chinese goods to as high as 145%, severely disrupting trade flows and causing order cancellations and production cuts in Chinese factories123710.
Chinese manufacturers, especially in export-driven sectors, have been hit hard as the tariffs reduce demand from the US, their largest customer. New export orders plunged to their lowest level since late 2022, exacerbating worries about China’s economic growth amid already weak domestic demand and a prolonged property sector crisis2910. The trade war has also led to broader economic strain, with calls for Beijing to implement further stimulus measures to support growth and shield businesses from the tariff impact710.
Despite the economic pain, China remains defiant, refusing to yield to US pressure and instead retaliating with its own tariffs of up to 125% on American goods. Chinese authorities are attempting to bolster confidence by promising support for affected companies and workers, easing lending conditions, and accelerating stimulus policies141012.
In summary, the escalating trade war has caused significant contraction in Chinese factory activity, disrupted business operations, and heightened economic uncertainty, prompting urgent calls for policy responses from Beijing while tensions between the two countries persist without compromise
