China September exports seen slowing further as U.S. tariffs bite

China’s export growth is expected to have further slowed in September, weighed down by a faster decline in orders as an intensifying trade war with the United States starts to hurt Chinese shipments, a Reuters poll showed. Import growth also likely came off recent highs, which would be a worrying sign for Chinese policymakers counting on domestic demand to shore up economic growth at a time of slower external demand.

Economists see any further slowing in China’s growth pace could prompt Beijing to roll out more stimulus measures, particularly steps to bolster small and medium-sized firms, a major source of employment. China’s September export growth likely slowed to 8.9 percent from a year earlier from August’s 9.8 percent gain, according to the median estimate of 32 economists in the Reuters poll. Growth in China’s factory sector in September stalled after 15 months of expansion, with export orders falling the most in more than two years, a private business survey showed. An official survey also confirmed a further manufacturing weakening.

The world’s two biggest economies last slapped tit-for-tat tariffs on each other’s goods on Sept. 24. There is no specific date set for the next round of tariffs, even as U.S. President Donald Trump has made repeated threats to impose them on virtually all Chinese goods. On Tuesday, the International Monetary Fund cut its global economic growth forecasts for this year and next, saying the U.S-China trade war was taking a toll. It also reduced China’s growth forecast for next year to 6.2 percent from 6.4 percent. To help shore up the economy, China on Sunday announced its fourth cut this year in the amount of cash banks have to set aside as reserves, reinforcing expectations of more policy easing ahead to counter the blow from the trade war with the United States.