China's Factories Being CRUSHED by U.S. Tariffs; Workers Going Unpaid, RIOT; For USA "Depression-Like" Conditions by August

China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus.  For the US, Artificial Intelligence says "Depression-Like" Conditions by August.

The manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, the weakest reading since December 2023, according to data released by the National Bureau of Statistics (NBS) on Wednesday. A reading below 50 signals a contraction.

Zhao Qinghe, a senior statistician at the NBS, said in a statement that the contraction in factory activity was due to “sharp changes in the external environment and other factors.”

The acute decline underscores the damage that US President Donald Trump’s 145% tariffs on Chinese goods have already inflicted on the country’s export and manufacturing-reliant economy. Chinese manufacturers began to feel the brunt of the sky-high levies last month, as order cancellations and production cuts spread, raising fresh concerns over the country’s growth prospects.

The April data marks a setback for Beijing, as top leaders strive to maintain a defiant and confident posture amid Trump’s trade war. The Chinese economy was already struggling with weak domestic consumption and a protracted property crisis.

While activity in China’s services and construction sectors showed marginal expansion, with non-manufacturing PMI hitting the 50.4 level, the April data points to a downturn. A parallel measure of new export orders also dived to 44.7, the lowest since late 2022 when the country was still grappling with the Covid-19 pandemic.

Robin Xing, chief China economist at Morgan Stanley, wrote in a Wednesday research note that the decline in PMI shows the impact of tariffs, which has led to weakening external demand.

“We believe the tariff impact will be the most acute this quarter, as many exporters have halted their production and shipments to the US, given heightened tariff uncertainties,” the report said. “The overall policy framework remains reactive and supply-centric, insufficient to offset tariff shocks.”

FACTORIES ARE NOT PAYING WORKERS

Unpaid factory workers are burning buildings, unrest is spreading, and Xi Jinping is fighting turmoil from within.

Below, video explains how bad things have already gotten:

#Chinaprotests

Workers at the factory of Shangda Electronics, a leading Chinese FPC flexible circuit board company, in Suining, Sichuan, went on strike on Monday to protest the company's long-term wage and social security arrears. According to the workers, the company has… pic.twitter.com/FY9RIfjPFL

— ChinaVideos (@ChinaVideos1) April 28, 2025

Here in the United States, the port of Seattle found itself pretty much EMPTY of inbound ocean container ships on Monday.  Three vessels were in the port and almost finished unloading, with zero vessels from China reported inbound and zero ships outside the port waiting to get in.

Elsewhere, the Port of Los Angeles says shipping volume will plummet 35% next week as China tariffs start to bite.

After Los Angeles, similar plummeting is expected at the port of Houston, two weeks from now, and similar plummeting is expected at the port of New York City, three weeks from now.

As containers stop arriving from China, Americans will begin to see product outages on store shelves.

"AI" Projects "Depression-Like" Conditions by July

Artificial Intelligence (AI) makes some stark observations and predictions for how the Trade War pans-out.  Below is one AI analysis which says the DOW drops below 30,000 and Depression-Like Conditions appear in the US by August.

MAY 2025 – Tipping Begins
• Markets peak, then stall as GDP and consumer data come in soft.
• Tariff costs hit wholesalers and retailers, leading to sudden price hikes in goods like electronics, appliances, clothing, and food.
• China retaliates—slaps tariffs on U.S. soy, semiconductors, and autos. EU follows with steel and tech equipment.
• Small businesses slow hiring; jobless claims tick up.

Outcome: Fear spreads. Volatility rises. Bond markets start whispering “stagflation.”



JUNE 2025 – Confidence Breaks
• CPI spikes due to import costs, but retail sales fall—a stagflation marker.
• Corporate earnings warnings surge. Supply chains begin to shut down.
• Farm bankruptcies increase, especially in the Midwest.
• U.S. allies publicly condemn U.S. policy, further isolating Trump diplomatically.
• Consumer confidence collapses.

Outcome: Recession officially declared in some models. Yield curve inverts. S&P 500 drops 15–20% from highs.



JULY 2025 – Crash Conditions Emerge
• Multiple retail chains and manufacturers announce mass layoffs.
• Dow drops below 30,000 as major indexes correct >25%.
• Corporate credit markets freeze—companies can’t refinance debt.
• Trump holds “America First Prosperity” rallies, denying any crisis.
• Fed is paralyzed: rate cuts won’t fix supply-driven inflation.

Outcome: This is the entry point into depression conditions—unemployment rising, deflation risk in asset markets, and structural demand destruction.



AUGUST 2025 – Depression Becomes Visible
• Unemployment hits 7–8%, rising fast.
• Consumer credit defaults surge.
• Housing demand crashes, prices roll over, mortgage lenders falter.
• Bank stress appears in regional lenders tied to small business or farming.
• Global markets decouple or fall into contagion.

Outcome: The term “depression” enters media discourse seriously. Trump’s approval collapses even among loyalists. Calls for emergency action rise—likely too late.



Bottom Line:

If the tariffs are not reversed by mid-June, the U.S. enters self-induced economic contraction that becomes depression-like by August 2025. The window to prevent that shuts fast—because inflationary damage front-loads, while policy responses (like investment pullbacks and layoffs) snowball after.