WSJ What’s News - Chinese Manufacturing Tumbles as Tariffs Bite

Episode Date: April 30, 2025

A.M. Edition for April 30. Chinese export orders and factory activity plummet as trade war damage begins to pile up. Plus, President Trump talks up his tariffs, even as voters’ economic concerns mount. WSJ White House reporter Alex Leary looks back on the president’s first 100 days in office. And Starbucks turns to tech to tackle unpopular in-store wait times. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Conditions apply to all benefits. Visit pcfinancial.ca for details. Warning signs for China's economy as trade war damage begins hitting home. Plus, President Trump talks up his tariffs even as voters' economic concerns mount. After 100 days back in the White House, America is a free, proud and sovereign nation once more and our magnificent destiny is closer than ever before. It's closer than ever before. You have no idea how close it is. And Starbucks turns to tech to tackle unpopular in-store wait times.

It's Wednesday, April 30th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. The proof of the trade war is in the numbers. Beijing released fresh data on export orders and factory production for April overnight, with neither indicator able to hide the damage that tariffs are causing to the engine of China's economy. Journal reporter Jason Douglas joins me now from Tokyo.

Jason, these readings don't seem all that hard to parse, frankly. Things are not going well. Yeah, that's right, Luke. There was a contraction in manufacturing activity down to the worst reading for I think about a year, maybe about 18 months. It was far worse than new export orders, which after all is a thing we're all watching closely. Those tumbled to the worst it's been since the end of 2022, which was when China was still very much grappling with COVID-19 and lockdowns and so on. And in fact, if you exclude the disruptions around COVID,

it's the worst export orders reading since 2012. There was also a weakness in production overall and in employment in the manufacturing sector. So these surveys are pointing to a bit of difficulty surrounding the trade war. Jason, these are readings that seem to validate reports from the US West Coast that shipments from China have sharply dropped off, which is, I imagine, what President Trump wants to see, a weakening of the flow of Chinese goods to the US. But where does all of this leave China? So China's economy isn't in a great position going into this trade war. About a third of its growth last year came from trade, where previously it has had much stronger domestic

spending, much stronger investment, much stronger consumption to power growth. Goldman Sachs estimates there are between 10 and 20 million jobs in China that are at factories that ship stuff to the US, so there is quite a lot of risk in terms of jobs. Growth in the first quarter according to Capital Economics was probably weaker than the official numbers actually suggested, and they expect growth this year to come in 3.5%, which is much lower than the 5% that the government is aiming for. So there's certainly lots of short term weakness built into the Chinese economy. The big question is, can the government do enough on the stimulus side

to really boost domestic spending to offset some of the headwinds from trade and then longer term reorient this economy away from exports so that it isn't so vulnerable in the future? That was reporter Jason Douglas in Tokyo. And whether the trade war is also hurting the US economy will come to the fore later today with a first quarter GDP reading set for release at 8.30am Eastern. While also on investors' radar today, word from Washington on further progress in trade negotiations. The S&P 500 staged an afternoon rally yesterday following comments that one such trade deal

had been reached with an unnamed country, closing out President Trump's first 100 days in office on a high note. Though as Journal Markets editor Katie Barnato told me, progress has been uneven across U.S. equities as stocks try and regain ground they'd lost in recent months. So over the last few days we have seen an interesting recovery in stocks on hopes that perhaps the trade war won't turn out as badly as feared and among the notable gainers are the big tech stocks, most notably Apple are very heavily exposed to China but of late they have been notable rebounders. Separately we've seen some outperformances by some of the big old-school industrial names or consumer

discretionary names. It's more related to, by contrast, fears of a slowdown. These types of companies are traditionally viewed as being stronger bets when the economy is weaker. Well, as Katie alluded to, it's shaping up to be another bumper earnings day with big tech front and center as Microsoft and Meta release their quarterly results after the market close. Just this morning, South Korean tech giant Samsung said profit in the first quarter was stronger than expected thanks to solid smartphone sales that offset weak semiconductor earnings,

which are being hit by U.S. restrictions on advanced chip exports to China and increased competition in supplying high-bandwidth memory products for AI applications. And we are exclusively reporting that Starbucks is using new technology to help fix one of its customers' biggest gripes, waiting too long for their coffee. A technology pilot at dozens of US locations has shaved two minutes off the average time to make a drink ordered inside cafes. Starbucks now plans to expand the pilot, which involved a proprietary order scheduling algorithm developed in-house to hundreds more locations across the U.S. in the hopes that will boost

sales following five consecutive quarterly declines. Coming up as President Trump celebrates his early accomplishments, we'll hear why voters are now less confident in his ability to deliver on his agenda. We've got that story and more after the break. The all-new, all-electric Can-Am Origin motorcycle takes you everywhere. Sleek power for the streets and deep adventure routes for the trails. Discover your origin today. Learn more at CanAmMotorcycles.com.

To mark his 100th day in office, President Trump returned to the rally stage in Michigan last night, shifting into campaign mode to tout his accomplishments. This is the best, they say, 100-day start of any president in history. And everyone is saying it. We've just gotten started. You haven't even seen anything. Journal White House reporter Alex Leary told our Kate Bullivant that although voters are showing mixed confidence in Trump's handling

of domestic priorities like inflation and immigration, the president is plowing ahead and shifting his focus abroad. Well, foremost on this agenda is trade. He's kind of sought to reorder the global trading order and he has accumulated a pile of unresolved issues with dozens of countries, including China, the big one, which is still hovering over his agenda. So trade is going to be very dominant in these next hundred days and beyond. It's going to really test the determination and the skill of his negotiating teams. It's a high priority for Trump, but it's also fraught

with a lot of political complications and potential downsides. And how has this reordering of global trade really impacted US relationships abroad? Well, he's come in very hard, very aggressive on his agenda and that has caused a lot of strain with some of our allies, especially in Europe, who are kind of looking at Trump's view towards Ukraine. He's famously squabbled with Zelensky and threatened to cut off aid. A lot of European leaders are not happy with that approach, so Trump's been very disruptive to their attempts

to sort of corral Russia. He's also kind of picked some fights, including with Canada, joking or not joking about trying to absorb that into becoming the 51st state. That has engendered a lot of distrust and backlash in Canada. He's also made moves on acquiring Greenland or at least taking some control that's royal to a lot of our traditional allies who were not keen to see such an aggressive move. He's proven himself to be divisive, but also very determined to achieve his goals. And so it's been a very tumultuous time on the world stage.

And that's going to just increase now is he's got to take on trade deals and deal with China and also let's not forget that he's also trying to work to find an end to the fighting in Gaza. That's another frustration of Trump's that he's also trying to work to find an end to the fighting in Gaza. That's another frustration of Trump's that that's lingered on. I mean that's caused some pain on the world stage as well. So with a lot of his attention being pulled beyond America's borders, where does that leave his domestic agenda, especially things like immigration? Yeah, Trump has put a lot of focus on immigration. It was one of the major issues of the campaign

and he's followed through with a very aggressive effort on the southern border. People crossing illegally into the country has really dried up. So that's a success for Trump and his administration. They're very proud of those numbers. However, internally, there's millions of people living in the country illegally, and those efforts have not been as robust for Trump. They've lacked some funding, and also it's politically treacherous at times to target people that have lived in the country for a long time. So part of the tax legislation that's moving its way through Congress would free up a lot of money for internal immigration

control. They'd need a lot more money to fund the efforts to find and deport people currently living in the U.S. So that's a big thing for Trump if they can get that money that would speed up deportations. And Alex, how have voters been reacting to his first 100 days in office? Yeah, Trump came into office with pretty solid numbers. Obviously, Republicans were extremely excited to see him return. There were a lot of independents and others who supported Trump. And so he came in sort of feeling very bullish.

He was promising a new golden age. And in the 100 days since then, some of that shine has come off. As Trump contends with a stubborn economy. We've seen a lot of gyrations in the stock market over some of his trade policies. And then of course, the immigration efforts and also Elon Musk and Doge have proven pretty controversial. A lot of Americans are just sort of whipsawed by the pace and the ferocity of Trump's agenda. And it has led to some weakening of his support and polls.

Now, core Republicans are very much aligned behind Trump, but independents and others who will be critical in midterm elections are starting to show some hesitation, if not regret, for backing the president. So that's a concern for Trump and Republicans as they head into the midterm season. But Trump so far is determined to plow ahead and do it in a noisy way that sometimes disregards the critics that want to see a more measured approach to government. Okay, so lots to watch out for going forward. Alex, thanks so much for breaking this down

for us. My pleasure. And that's it for What's News for this Wednesday morning. Today's show was produced by Kate Boulevent and Daniel Bach. Our supervising producer is Sandra Kilhoff and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening. night.