China's international trade grew 0.1% in Aug

Clay Curtis
September 11, 2019

China's exports unexpectedly fell in August as shipments to the United States slowed sharply, pointing to further weakness in the world's second-largest economy and underlining a pressing need for more stimulus as the Sino-U.S. trade war escalates.

China has pressed the United States to cancel the tariff increase, but said last week that a September round of talks was being discussed between the two.

"Exports are still weak even in the face of substantial yuan currency depreciation, indicating that sluggish external demand is the most important factor affecting exports this year", said Zhang Yi, economist at Zhong Hai Sheng Rong Capital Management.

August exports fell 1 percent from a year earlier, the biggest fall since June, when it fell 1.3 percent, customs data showed on Sunday. China's August trade surplus against the USA was $26.95 billion.

A new round of U.S. tariffs on some Chinese goods and Chinese tariffs on United States goods is scheduled to take effect from 0401 GMT on Sunday.

The U.S. Trade Representative's Office said on Thursday it would collect public comments through September 20 on a planned tariff increase to 30% on a $250 billion list of goods already hit with a 25% tariff. Talks are scheduled at the deputy level in Washington for this month, and high-level officials including Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He will meet in early October, Kudlow said. Washington says some must stay to ensure Beijing carries out any promises it makes.

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In their latest escalation, Washington imposed 15% tariffs on $112 billion of Chinese imports and plans to hit another $160 billion on December 15.

The two sides have agreed to hold further discussions in Washington in early October, later than expected.

On September 1, the USA imposed a 15% levy on more than $125 billion in Chinese imports including smart speakers, Bluetooth headphones, books, babies' nappies and many types of footwear. That would extend penalties to nearly everything the United States buys from China. Imports from the U.S. slumped 22.4 percent.

Beijing responded by imposing duties of 10 per cent and five per cent on a range of American imports.

The General Administration of Customs said that in the eighth month of 2019, China's foreign trade stood at 2.72 trillion yuan ($381.92 billion), reports Efe news.

As it stands now, only $50 billion of USA -made goods sent to China are not being affected by the tariff penalties. China's trade surplus and its technology development strategy will be discussed in the meeting. So, the fact that they buy things 15 percent cheaper means China is paying for indeed the tariff because when you look at the net economics, it's not costing USA companies anything because of the depreciation.

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