BEIJING, China: China's manufacturing sector lost steam in April, with activity shrinking at the fastest pace in over a year, as new U.S. tariffs under President Donald Trump's "Liberation Day" package took effect and dampened global demand.

Data from the National Bureau of Statistics (NBS) showed this week that the official purchasing managers' index (PMI) slipped to 49.0 last month from 50.5 in March. That marked the lowest reading since December 2023 and fell short of the 49.8 median forecast in a Reuters poll. A reading below 50 signals contraction.

The figures suggest that China's recent export-led recovery has been disrupted, just as factory owners face dwindling overseas orders and sluggish domestic demand. Manufacturers ramped up shipments ahead of the new tariffs, but the expiration of that buffer is now adding pressure on Beijing to intensify stimulus efforts.

Zhao Qinghe, an NBS statistician, attributed the decline to "sharp changes in (China's) external environment." A separate private-sector survey also released this week showed a drop in new export orders and a broader slowdown in factory output.

"The sharp drop in the PMIs likely overstates the impact of tariffs due to negative sentiment effects," said Zichun Huang, China economist at Capital Economics. "Although the government is stepping up fiscal support, this is unlikely to fully offset the drag, and we expect the economy to expand just 3.5 percent this year."

Huang noted that the new export orders index fell to its lowest level—excluding COVID-related disruptions—since April 2012.

The non-manufacturing PMI, covering services and construction, also weakened to 50.4 from 50.8, though it remained just above the growth threshold.

Trump's sweeping 145 percent tariffs have landed at a difficult moment for China, which is grappling with weak consumer spending, deflationary pressures, and a lingering property crisis.

China's yuan dipped slightly following the data, reflecting investor concerns over the economic fallout from rising trade tensions.

While Beijing has rejected suggestions it will negotiate a rollback of the U.S. tariffs, officials have accelerated this year's stimulus efforts in response. Wang Qing of Oriental Jincheng predicted more policy easing ahead, including potential interest rate and reserve requirement cuts.

Despite mounting challenges, China's planning agency remains optimistic. "We are confident the country will achieve its 2025 economic growth target of around five percent," said Zhao Chenxin of the National Development and Reform Commission.