China's factory activity in May shrank for the first time in eight months, a private-sector survey showed on Tuesday, indicating U.S. tariffs are now starting to directly hurt the manufacturing superpower.

A private gauge of China’s manufacturing activity tumbled in May, touching the lowest level since September 2022 as tariffs continue to weigh, despite the U.S. trade truce. The Caixin manufacturing purchasing managers index signaled a contraction for the first time in eight months.

BEIJING: Chinese factory activity hit a more than two-year low in May, a closely watched survey showed today, as a detente in Beijing’s trade war with Washington was offset by ongoing domestic problems in the world’s number two economy.

The U.S-China trade truce is at risk of falling apart with both countries accusing the other of violating the agreement. NBC News’ Christine Romans breaks it down. Politico White House and Foreign Affairs Correspondent Eli Stokols joins Katy Tur to share his analysis.

China has blasted the U.S. for issuing AI chip export control guidelines, stopping the sale of chip design software to China, and planning to revoke Chinese student visas.