 "First signs of Trump tariff impact on China as factory output, exports declines; worry in Japan too")
China’s manufacturing sector shrank for the first time in three months in April, offering the clearest evidence yet that US President Donald Trump’s sweeping new tariff regime is beginning to bite.
The downturn in factory activity, coupled with a sharper-than-expected plunge in export orders, marks the most significant early signal of disruption to the world’s largest exporter since the White House announced its so-called “Liberation Day” tariff package.
The official manufacturing purchasing managers’ index (PMI), released Wednesday (April 30) by China’s National Bureau of Statistics, slipped to 49.0 in April, falling below the 50-point threshold that separates growth from contraction and undershooting economists’ forecasts.
The March figure had registered 50.5. Particularly concerning for Beijing, the subindex for new export orders collapsed to 44.7, down sharply from 49.0 in March, highlighting the immediate blow to China’s overseas sales, Wall Street Journal reported.
The disappointing data shows the mounting pressure on China’s export engine following the imposition of steep US tariffs aimed at correcting what Trump has repeatedly described as a long-standing “unfair trade imbalance.” The White House’s latest tariff package, which came into effect earlier this month, targets a vast swathe of Chinese goods and marks a significant escalation in Washington’s protectionist push.
The broader Chinese economy also showed signs of strain. The country’s nonmanufacturing PMI, which includes services and construction, slipped to 50.4 from 50.8 in March. Service activity edged lower to 50.1, while the construction sector, typically a buffer during economic turbulence, also lost momentum, falling to 51.9 from 53.4.
Impact Shorts
More ShortsThe economic tremors in China are not going unnoticed elsewhere in the region.
Worry rises in Japan
In Tokyo, concerns are rising that Trump’s aggressive trade stance could imperil broader Indo-Pacific stability. Speaking at the Center for Strategic and International Studies in Washington, Itsunori Onodera, policy chief of Japan’s ruling Liberal Democratic Party and a former defence minister, urged the US to reconsider its tariff plans, warning that alienating Southeast Asia could backfire.
Countries of the 10-member Association of Southeast Asian Nations “may become more distant” from the US because the tariffs, Onodera said, adding that Japan hoped the US would reassess its approach.
Japan has been drawn into the tariff crossfire despite being a long-time US ally and a major investor. Alongside a 10 per cent baseline duty, Japanese exports have been slapped with additional levies on key sectors including cars, steel and aluminium. Though Trump paused a punitive 24 per cent “reciprocal” tariff on Japanese vehicles for 90 days, pressure remains high.
Japan’s chief trade negotiator, Ryosei Akazawa, departed for Washington on Wednesday for a second round of talks aimed at securing relief. The government may offer concessions such as streamlined import procedures for US vehicles or increased purchases of American corn, soybeans, and liquefied natural gas.
“There has been no change to our stance of strongly demanding that all the tariffs be scrapped,” Akazawa told reporters, warning that “Japanese companies are losing money each and every day” under the current tariff regime.
With Beijing grappling with the initial economic fallout and Tokyo scrambling for a diplomatic off-ramp, the Trump administration’s tariff blitz appears to be reshaping not just trade flows, but also regional alliances and political calculations across Asia.
With inputs from AFP
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