China's Trade Surplus With the US hits record high

Ivan Schwartz
July 14, 2018

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.

China's monthly trade surplus with the United States hits a record high in June, amid a bitter trade dispute between the world's two largest economies. "Trade wars are not easy to win", he said.

Donald Trump had recently upped the ante by threatening higher tariffs on a colossal $200 billion of Chinese imports.

Exports rose 11.3 per cent over a year earlier to $216.7 billion, down from May's 12.6 per cent growth, customs data showed Friday.

China's commerce ministry confirmed last month that Chinese exporters were front-loading shipments to the U.S. to get ahead of expected tariffs - a situation that could exacerbate any slowdown in shipments toward the year-end.

"Not only will Chinese exporters suffer but American consumers as well", she told the BBC.

"We expect slowing export growth to put downward pressure on the current account and RMB (yuan), and believe China is likely to be willing to make concessions in future rounds of trade negotiations with the U.S.", Nomura analysts said in a note to clients.

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But, he said, China has another option - Beijing could reduce the impact of U.S. tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.

The ministry encouraged companies to increase import of soybean, soymeal, vehicles, aquatic products from other markets.

"So we would be back to square one", Mr Kuo said, with China exporting more to the United States than it buys from the country.

"We expect the trade numbers for July to disappoint since that's when the first round of United States tariffs took effect", China analyst at Nordea Bank in Singapore Amy Zhuang told the BBC.

In June the surplus with the U.S. was at $28.97 billion, up from $24.58 billion in May, according to Reuters calculations based on customs data released on Friday. China's trade surplus with the USA over the same period was $133.76 billion, up from $117.51 billion past year.

The United States, Canada and Mexico have been negotiating to revamp the 24-year-old trade pact since last August, but talks have stalled over USA demands on autos and other issues.

China logged a trade surplus of $41.61 billion for the month, compared with forecasts for a $27.61 billion surplus in June and a surplus of $24.92 billion in May.

Other reports by GizPress

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