US manufacturing contraction deepens amid trade uncertainty
Washington, United States (AFP)—A US manufacturing slump deepened last month as uncertainty related to President Donald Trump’s tariffs rippled through the sector, according to survey data published Thursday.
The US leader unveiled sweeping tariffs against most countries in early April, before changing course for many nations but leaving China facing new duties totalling 145 percent before sector-specific measures are taken into account.
The stop-start rollout of the levies, and the ensuing uncertainty, have caused confusion in financial markets, sending volatility surging.
The Institute for Supply Management (ISM) manufacturing index slipped to 48.7 percent in April, a touch below its level in March, and below the 50-point mark separating expansion from contraction.
This was slightly better than the market consensus, according to Briefing.com.
“Demand and production retreated and destaffing continued, as panelists’ companies responded to an unknown economic environment,” ISM survey chief Timothy Fiore said in a statement.
“Prices growth accelerated slightly due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth,” he added.
Businesses responding to the survey flagged Trump’s trade policy rollout as a key cause for concern.
“Tariff trade wars are incredibly volatile, quickly changing, and disrupting a ton of our current work,” an apparel and leather company respondent told ISM.
“The recently imposed 145-percent tariff rate on Chinese imports is significantly affecting our 2025 profitability,” responded another manufacturing firm.
“Due to the complexity of our parts and the lack of alternate sources, we are unable to find any alternate suppliers — especially at a reasonable cost — to our current Chinese sources,” they added.
Oxford Economics senior US economist Matthew Martin said while the release had been slightly better than expected, the outlook for the sector remained bleak.
“Respondents’ comments were rife with tariff troubles, noting weaker demand, higher prices, and supply chain disruptions,” he wrote in a note to clients shared with AFP.
“Troublingly, April’s report notes that firms are pivoting towards layoffs and away from hiring freezes and attrition to control costs,” he added.
