Import orders from China decrease in April, signaling the initial impact of Trump's tariffs.
THE TOLL OF TARIFFS ON CHINA'S ECONOMY
The ongoing trade war between the U.S. and China is taking its toll on China's economy, as evidenced by declining export orders and weakened manufacturing activity. According to surveys of Chinese factory managers, the official Purchasing Managers’ Index (PMI) dropped to 49 in April 2025, teetering on the brink of contraction territory – the lowest since December 2022[1].
New export orders – a crucial indicator of trade flows – plummeted to 44.7 in April, the weakest level since late 2022[1]. These findings suggest that the U.S. tariffs are indeed causing harm to China’s export sector.
Analysts estimate that the tariffs could possibly shrink China's 2025 GDP growth by a significant 2.4%[2]. In the year 2024, bilateral trade between the U.S. and China declined to $582.4 billion, down from $661.5 billion in 2018[2]. Forecasters predict China’s annual growth for 2025 to be around 3.5%[1], as fiscal stimulus measures struggle to offset the decreasing external demand.
The trade strife is leading to increased pressure on Beijing to explore additional stimulus measures and even potentially negotiate with the U.S. However, the Chinese government maintains a firm public stance[1][2]. Economists argue that while negative sentiment may intensify the PMI's contraction signal, the tariffs are indeed eroding China’s export competitiveness[1].
Moreover, the burden falls most heavily on larger manufacturers, with smaller, more labor-intensive businesses still enjoying cost advantages that China can boast[3].
Perceptions remain grim, with business sentiment registering at one of its lowest levels ever[1]. Several private economists have already revised their outlook for the economy this year and the next[1].
Note 1: The Economic Impact of US-China Tariffs
Note 2: China’s Export Meltdown Begins
Note 3: ANZ Research Report on US-China Tariffs' Impact on Chinese Manufacturers
- The ongoing trade war with the U.S. could potentially lead to a fallout in jobs within China's export sector, as tariffs seem to be causing harm to the industry.
- In Seattle, the business outlook remains grim, with several economists revising their forecast for the economy in both 2025 and 2026 due to the impact of tariffs on the economy.
- Analysts predict that that the U.S. tariffs on China could shrink China's projected GDP growth for 2025 by a significant 2.4%, affecting the overall state of finance in the country.
- Amazon could potentially see a shift in its supply chain, as smaller, more labor-intensive businesses continue to enjoy cost advantages in China, despite the tariffs.
- Huang, an economist, maintains that the tariffs are indeed eroding China’s export competitiveness, leading to increased pressure on Beijing to explore additional stimulus measures.
- Looking ahead to 2024, it is predicted that the decline in bilateral trade between the U.S. and China may continue, posing challenges for businesses and economic growth prospects in Seattle and beyond.
