China's Manufacturing Activity Cools as Tariffs Impact Economy

Manufacturing PMI Decline

• 📉 China's purchasing managers' index for manufacturing fell to 48.3 in May, marking the first time below the 50-point threshold in eight months.
• ⚠️ This decline indicates that tariffs are beginning to negatively impact China's economy.

Trade Negotiations and Stalled Talks

• 🤝 Trade truce negotiations between Washington and Beijing appeared stalled, with US officials accusing China of blocking progress.
• 🗣️ Commerce Secretary Howard Lutnik described China's approach as "slow rolling the deal."

Export Orders and Employment Slump

• 📦 New export orders for Chinese firms decreased for the second consecutive month, with tariffs cited as a primary reason.
• 📉 Employment in the manufacturing sector experienced its sharpest decline since the beginning of the year.

Policy Considerations

• 🇨🇳 Chinese Premier Li Qiang stated that policymakers are exploring new tools to support the economy, potentially including unconventional measures.