A worker produces metal bars for overseas clients in a factory in Zijiao township, Binzhou, East China's Shandong Province, on April 15, 2025. China's foreign trade in goods in the first quarter of 2025 grew by 1.3 percent year-on-year, reaching 10.3 trillion yuan ($1.41 trillion). Photo: VCG

The China Federation of Logistics & Purchasing (CFLP) said on Tuesday that the global manufacturing purchasing managers' index (PMI) remained below 50 in April for a second month this year, signaling a manufacturing sector contraction and increasing downward pressure on the global economy. 

The global PMI came in at 49.1 in April, down 0.5 points from March, reflecting continued weakness in global manufacturing. The high tariffs imposed by the US on other economies have exacerbated the downside risks, shadowing global economy, according to the CFLP.

The federation said that it is foreseeable that if tariff issues remain unresolved, their impact on the global economy will continue to escalate. 

"Global trade growth will persistently decline, leading to a further slowdown in economic expansion. Nations worldwide will inevitably face mounting pressure to restructure industrial and supply chains, adjusting trade strategies to adapt to the new commercial landscape," said the federation.

Asia's manufacturing sector has remained at the expansion-contraction threshold, but all other regions are showing contraction trends, said the CFLP.

The Americas' manufacturing PMI was 48.4 in April, down 0.5 points from the previous month, a third consecutive monthly decrease this year.  

Asia's manufacturing PMI stood at 50 in April, exactly at the threshold dividing expansion and contraction, and it was down 1.3 points from March. Growth in Asian manufacturing slowed due to the impact of US tariff hikes, the CFLP said.

In Europe, the manufacturing PMI rose slightly by 0.2 points to reach 48.4. However, Europe's manufacturing sector remains in contraction, with its fragile recovery facing growing challenges from the US tariffs and geopolitical conflicts there, according to the CFLP.

Africa's manufacturing PMI was 49.5, down 1.3 points from the previous month. After briefly rebounding above 50 in March, the index returned to contraction territory.

The US tariff policies lack a sound economic rationale. While being justified as "boosting fiscal revenue" and "reshoring manufacturing to the US," US-initiated tariffs have instead exacerbated global inflationary pressures, Zhao Xijun, co-president of the China Capital Market Research Institute at the Renmin University of China, told the Global Times on Tuesday.

"Moreover, tariffs drive up corporate costs, including US companies, forcing rapid supply chain restructuring," said Zhao.

UN Trade and Development (UNCTAD) also pointed out in a report released on April 25 that manufacturers and investors are delaying decisions, reassessing supply chain strategies and stepping up risk management efforts.

Apart from manufacturing and supply chains, major financial institutions have recently downgraded global economic and trade growth projections, considering the overall impact of tariffs.

The WTO warned in its Global Trade Outlook and Statistics report, published in April, that after adjusting baseline projections to account for the impact of recently announced tariffs and heightened trade policy uncertainty, WTO economists now foresee a -0.2 percent contraction in merchandise trade in 2025 - down from the 2.9 percent growth in 2024.

Baseline projections suggest that merchandise trade growth could have been as high as 2.7 percent in 2025 had tariffs and uncertainty remained low, read the WTO report.

In its latest World Economic Outlook in April, the IMF revised its 2025 global growth forecast down to 2.8 percent, a 0.5 percentage-point reduction from its January estimate, reflecting "effective tariff rates at levels not seen in a century and a highly unpredictable environment."

UNCTAD said in its April report that global growth is expected to slow to 2.3 percent in 2025 as trade and economic policy uncertainty erode business and investor confidence. A global growth forecast below the 2.5 percent threshold is often associated with a global recession, it said. 

UNCTAD warned that rising uncertainty is weighing heavily on the global economy. Trade policy uncertainty, now at historic highs, is eroding business confidence and reshaping global trade patterns.

Given the heightened uncertainty surrounding the global economic recovery, it is more critical than ever to stay committed to pursuing "the right course of action," the CFLP stressed.

Countries worldwide should, based on mutual respect, steadfastly strengthen multilateral economic and trade cooperation, promote trade facilitation and mitigate the negative effects of US tariffs on the global economy, according to the CFLP.

"The world today faces significant uncertainties. All countries ought to uphold free trade, defend the rules of global commerce and safeguard the principles of world economic development," Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Tuesday.

Yang noted that the uncertainties, primarily stemming from the US tariff hikes, have also led to a decline in the creditworthiness of US-related assets.

Recently, investor concerns over the swollen US government debt and its elevated trade tariffs have triggered a sell-off of US Treasury bonds. While the US dollar was once seen as a safe-haven asset, investors are now retreating from dollar-denominated assets, leading to a sharp decline in the US Dollar Index, said Yang.