Asian Factory Activity Suffers On Another US-China Trade Hassle
Manufacturing activity in Asia weakened in July on US-China trade war. China's manufacturing sector rose at the slowest pace in 8 months. New export orders hit the 2-year minimum. Factory activity from Australia to Japan also showed signs of a slow down. The Harpex container index dropped 10% from its 7-year maximum. China's Caixin/Markit Manufacturing PMI declined from 51.0 to 50.8.
US and China hit each other with tariffs on $34 billion imports, however, there is now an evidence of renewed trade fight. Donald Trump recently announced that instead of previously promised 10%, he might hit China with 25% tariffs on Chinese imports worth 200 billion dollars. The list could include food, chemicals, steel and aluminum, consumer goods. China pledged to retaliate.
Aakanksha Bhat (Asia economist at HSBC in Hong Kong) delivered: "The data breakdown indicates that an uncertain demand outlook amidst the U.S.-China trade tariffs weighed on both output and sentiment".
Julian Evans-Pritchard (senior China economist at Capital Economics in Singapore) said: "China’s economy is on track to slow this quarter and next".
Asian countries already feel all the potential damage from the trade war. Taiwan and South Korea are expected to be the biggest victims. Indian, Indonesian and the Philippine economies will be hurt as well.