New economic data shows key Chinese industries continuing to struggle in the wake of President Donald Trump’s reciprocal tariffs.
Retail sales, which track the sale of new and used goods to the general public, slowed to 5.1% in April, missing official projections for a 5.5% expansion, according to numbers from China’s National Statistics Bureau reviewed by Reuters. China’s industrial output fell to 6.1%, down from 7.7% the month before, as tariffs keep biting Chinese factories.
Following Trump’s tariffs taking effect, 16 million Chinese jobs were put at risk of vanishing, leading to layoffs and worker protests. Even though recent talks led to Tariffs being lowered from 145% to 30% over the next 90 days to allow for further trade talks, experts say China’s economy is not likely to rebound quickly.
“When you increase the tariffs to such a high level, many companies decide to stop hiring and to start basically sending the workers back home,” Alicia Garcia-Herrero, chief Asia Pacific economist at investment bank Natixis, told Reuters.
She estimated that if the tariffs were raised back to April’s level, China’s economy could slow by as much as 2.5%. Even in a best case scenario, China’s economic growth is likely to stall.
“At 30%, I doubt they will say, okay, come back. Because it’s still high,” she added. “Maybe the Chinese government is saying, wow, this was amazing. But I think many companies are not sure that this is going to work.”