China's trade surplus with U.S. grew, while global gap shrank

Clay Curtis
June 10, 2018

The country's global surplus narrowed by 39 percent to $24.9 billion.

China hopes the United States will meet it half way and promote balanced and coordinated development of economic and trade cooperation between both countries, the Ministry of Commerce said on Thursday.

The growth rate of the value of USA exports to China dropped from 17.9% to -4.6%, while the growth rate of Chinese exports to the US declined from 11.0% to 2.0%.

"The particularly strong May figures are due to uncertainties from the trade negotiations", said Iris Pang, an economist at ING Groep NV in Hong Kong and the only accurate forecaster of May import growth in a Bloomberg survey.

For January-May combined, exports rose 13.3 percent from the same period past year, and imports rose 21 percent.

Shortly after the end of the exemption, the European Union initiated a dispute with the United States at the WTO, and announced Wednesday the start of applying rebalancing duties on US products in July, as part of the "three-pronged response". Aside from the short-term impact of the lunar calendar-based timing of China's Spring Festival holiday, which effectively shuts down China's ports for a week in either January or February each year, April 2018 saw perhaps the most significant simultaneous disruption to trade between the two nations that has occurred outside of periods of recession.

"Even if a trade war is avoided, Chinese trade growth is still likely to edge down over the coming year as the global economy loses momentum", said Evans-Pritchard.

The trade deficit between the US and China, which US President Donald Trump has long criticized, continued to grow in May, Chinese customs data showed Friday.

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During recent negotiations in Beijing, Chinese trade officials offered to buy more U.S. agricultural and energy products but warned that the deals would not go into effect if the United States enacts the tariffs.

China's total trade data in May was robust, with exports rising 12.6% compared to the same period a year ago, while imports jumped by 26%.

The total value of China's trade for May came to 400.8 billion dollars.

For January-May, the surplus stood at US$104.85 billion, compared with about US$92.9 billion in the same period past year.

Trump has threatened tariffs on up to $150 billion of Chinese exports as part of a separate dispute over Chinese intellectual property (IP) protections. A final list of goods in the first wave of tariffs is expected to be released by the United States administration next week, and the Treasury Department plans to limit Chinese investment in the US.

Beijing has cut import duties on automobiles and some consumer goods and to ease curbs on foreign ownership in its auto industry.

So far, China's customs hasn't released final April commodities trade statistics which had been due on May 23, and some traders have speculated that Beijing may want to hide statistics that could somehow undermine its negotiating stance.

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