Global Factories Slow Down Ahead of Trump’s New Tariffs, Amid Fears of Economic Fallout

Factories across the globe are feeling the strain as they brace for a fresh wave of tariffs from U.S. President Donald Trump. From Japan to Britain to the U.S., manufacturing activity declined in March, driven by anxiety over expected trade levies and soft global demand, according to global Purchasing Managers’ Index (PMI) data released Tuesday.

President Trump is expected to announce the new tariff package—dubbed “Liberation Day”—on Wednesday. The proposed measures include higher duties on steel, aluminum, automobiles, and all Chinese imports, part of a broader protectionist push that economists warn could destabilize an already fragile post-pandemic recovery.

Asia’s manufacturing hubs took a hit:

• Japan posted its steepest factory decline in a year.

• South Korea and Taiwan also reported weakened output.

• China, however, saw an uptick in factory activity as exporters rushed shipments ahead of tariff implementation.

In the United States, after a strong start to 2025, factory output slipped into contraction territory. The ISM manufacturing PMI fell to 49.0 in March from 50.3 the previous month, with new orders hitting their lowest level since May 2023.

Economist Julian Evans-Pritchard of Capital Economics noted that while Chinese exporters may temporarily benefit from pre-tariff surges, “the drag from tariffs will soon outweigh the boost.”

Europe saw mixed results:

• Euro zone manufacturing posted its first growth in two years—likely due to order front-loading from the U.S.

• Germany saw a modest production rebound.

• France’s factory downturn eased slightly.

• The U.K., however, faced a slump as new orders dried up and business confidence waned.

Despite trade uncertainties, global stock markets rose on Tuesday, supported by Wall Street’s gains. Meanwhile, gold surged to a record high, reflecting broader investor caution.

Elsewhere in Asia, South Korea’s exports slowed and Japan’s Tankan business sentiment index fell to a one-year low, further underlining the economic tension building ahead of the U.S. tariff rollout.