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Investing.com-- China’s services sector grew at a slower-than-expected pace in April, private purchasing managers index (PMI) data showed on Tuesday, as businesses grappled with increased disruptions from a bitter trade war with the United States.
The Caixin China Services PMI fell to 50.7 in April from 51.9 in March, missing expectations of 51.7.
The slowdown in the PMI largely reflected disruptions in new business activity, stemming from a dire tariff exchange with the U.S. in April. U.S. President Donald Trump imposed 145% tariffs on Chinese goods, to which China retaliated with a 125% tariff on American goods.
While services were not covered by the tariff exchange, weakness in manufacturing spilled over into the sector. The Caixin reading comes after government PMIs last week showed a sharp contraction in manufacturing activity in April, as export orders plummeted in the face of U.S. tariffs.
Trump also sparked concerns over tariffs on services, after he proposed imposing a 100% tariff on all foreign movies in the United States.
Tuesday’s data further outlines the headwinds faced by Chinese businesses from a bitter U.S. trade war. The PMI data also showed a sharp deterioration in sentiment among Chinese businesses, as they braced for more disruptions.
While both Washington and Beijing have signaled some openness to trade talks, official dialogue is yet to begin in earnest.