China Faces Severe Economic Contraction Amid US Tariff Impact

China has escalated its trade war with the United States by sharply reducing agricultural imports, including a major cancellation of American pork orders, directly impacting US agricultural states with strong ties to former President Trump. At the same time, China’s economy is facing its most severe downturn since the COVID-19 lockdowns, with factory activity dropping below growth levels and new export orders hitting lows not seen since 2022. Analysts and financial institutions attribute much of this economic contraction to the sweeping US tariffs imposed under Trump, which have reached 145% on Chinese goods, prompting China to retaliate with high tariffs on American products. This tit-for-tat escalation has led to significant declines in Chinese cargo shipments and raised concerns about job losses and broader economic slowdown in China. US officials and experts note that while the tariffs have begun to 'bite' by hurting China's manufacturing sector, there is hope for a negotiated resolution if fair trade practices are established. Both sides, however, remain firm in their positions, with President Xi vowing not to yield to US pressure and Washington maintaining that China must treat the US fairly.