China exports accelerated in July despite rise in US tariffs

Daniel Fowler
August 12, 2018

Chinese state media on Thursday accused the United States of a "mobster mentality" in its move to implement additional tariffs on Chinese goods, and warned Beijing had all the necessary means to fight back.

Yet official figures appear to show that the increasingly fierce dispute has not applied the brakes to Chinese exports, with the latest data revealing growth of 12.2 per cent in July.

Total soybean imports for the marketing year to date (October through July) now stand at 76.8 million mt, virtually unchanged from the year before and way down on the 5% increase that analyst were predicting at the end of 2017.

Currently, most U.S. LNG exports are secured on long-term contacts, so the impact will be fairly limited until the deals expire.

The U.S. has been seeking to have China reverse course on what it calls Beijing's "unreasonable and discriminatory" policies related to technology transfer and intellectual property and to narrow the trade deficit. Under that agreement the U.S. won major concessions, including allowing it to retain a 25 percent tariff on South Korean trucks and an agreement to cap steel exports at 70 percent on their level over the past three years. China has promised to retaliate with another $16 billion in tariffs on US imports. China has vowed to retaliate to an equal degree.

New tariffsThe Trump administration announced it will hit China with a 25% tariff on an additional $16 billion of goods on August 23. There was no immediate response from Beijing. Coal was also in the draft list issued in June. Beijing has retaliated with higher duties on a similar amount of American goods. The U.S.is the world's top producer of natural gas and is a growing LNG exporter.

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"China's yuan gave up earlier gains that came after the central bank was said to have met with major lenders to emphasize currency stability, while mainland stocks fell following their best day in more than two years".

China's crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country's smaller independent, or "teapot", refineries.

The trade disputes between the United States and China have intensified lately, which can potentially escalate to a full-fledged trade war.

LNG cargo prices for delivery in September were around US$10 per million British thermal units (Btu), unchanged from last week, while cargoes for delivery in October were priced around US$1 per mmBtu higher, traders said. In the meantime, its trade gap with the 28-nation European Union contracted 8 percent to $11.2 billion.

Meanwhile, the Chinese Ministry of Commerce said it must retaliate against the USA tariffs "to defend the nation's dignity".

USA studios had hoped for an improved deal for imported films past year.

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