China’s factory activity unexpectedly deteriorated in July to a three-month low despite a tariff truce with the US, as early signs emerge exports are slowing and weak domestic demand persists.

Factory activity fell to a six-month low in July as signs emerged that China’s exports are slowing despite a ‘tariff truce’ with the US.

China’s top leaders have pledged to help companies slammed by higher U.S. tariffs but held back on major moves after trade talks.

The United States and China have agreed to work on extending a deadline for new tariffs on each other after two days of trade talks in Stockholm concluded on Tuesday, according to Beijing’s lead negotiator.

Chinese and American trade negotiators concluded their two-day meeting in Stockholm without a clear path forward to avert tariffs from skyrocketing back to ultra-high levels that formed an effective blockade on trade between the world’s two largest economies.