China trade surplus with U.S. hits record $29bn high

Daniel Fowler
July 13, 2018

Trump has railed against China's trade surplus with the U.S., which ran at $375 billion in 2017, and has demanded Beijing cut it. Washington has warned it may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of USA imports from China past year.

Thus far, China has imposed retaliatory tariffs on $34 billion-worth of USA imports, targeting politically sensitive goods such as soybeans.

As the US-China trade war escalates, the latest trade numbers appear to back Washington's biggest gripe with Beijing.

China's monthly trade surplus with the USA hit a record high of almost $29bn (£22bn) in June as exports to America remained strong.

"Those talks produced progress, so much so that the U.S. government said they would put the trade war on hold, but all of a sudden an announcement was made to impose tariffs on imports from China".

"Still, we do not expect a plunge because those tariffs only targeted $34 billion worth of goods which is fairly small compared to China's total trade", she said.

The dispute has jolted global financial markets, raising worries a full-scale trade war could derail the world economy.

China's June exports rose 11.3 percent from a year earlier, China General Administration of Customs reported, beating forecasts for a 10 percent increase according to the latest Reuters poll of 39 analysts, and down from a 12.6 percent gain in May.

"Looking ahead, export growth will cool in the coming months as USA tariffs start to bite alongside a broader softening in global demand", Julian Evans-Pritchard, the senior China economist at Capital Economics in Singapore, said.

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Mr Khan continued to refuse to rise to Trump's taunts after the US President attacked him again on his visit to the UK. The police will be out in full force to cover Mr Trump's short visit in the UK.

However, a lower yuan would make it more expensive for China to import U.S. goods.

As the world's largest exporter, China has threatened retaliatory action against the tariffs and pledged that it would lodge a complaint with the World Trade Organization.

Growth in imports for June showed a moderate slowdown from May, official data showed on Friday.

"This trade dispute will definitely have an impact on China-US trade and will have a very negative impact on global trade", a Chinese customs administration spokesman said today. China also said both its imports and exports with the USA rose in the first half of 2018.

In yuan terms, China's exports grew 3.1% in June and imports rose 6.0%.

"There will be challenges facing foreign trade with rising instabilities and uncertainties in the global environment, " said a Chinese customs agency report.

In a sign Beijing is seeking alternative supplies of the commodities as it hit US imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries.

However, analysts said the June figures were a sign that exporters rushed to beat the initial tranche of tariffs, which came into effect in the first week of July.

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