China Economy: US Trade War Adding Pressure To Declining Industrial Profits?

China's industrial firms are showing signs of less profitability amid the U.S.-China trade war and an overall economic slowdown of the Chinese economy.

Industrial profits among Chinese firms are down 3.1% for the month of the June from a year earlier, the National Bureau of Statistics reported Saturday. In May, profits grew at 1.1%.

In the first six months of 2019, profits decreased 2.4% from the same period last year.

This isn't the only recent sign of a struggling Chinese economy. Last week, figures showed that the Chinese GDP grew at its lowest level in 27 years, at 6.2% in the second quarter of 2019.

The U.S. and China have had a tense economic relationship this year. Earlier this year, President Donald Trump ordered to increase tariffs to 25% on $200 billion of Chinese goods. China retaliated with tariffs of its own, which forced Trump to bail out U.S. farmers.

The two countries agreed to a tariff truce during the G20 summit at the end of June. Trump and Chinese President Xi Jinping could come together to work on a trade agreement to avert further escalation.

Another factor that is causing a slowdown in the Chinese economy is the rising cost of labor and manufacturing. The rise in costs may cause international companies to look at other Asian countries such as Vietnam for manufacturing purposes.