China trade surplus with United States hits record high in June

Virginia Carson
July 15, 2018

Firing the first shots in a trade war that has rattled financial markets and raised risks to the global economy, Washington last week imposed 25 percent tariffs on $34 billion of Chinese imports, drawing rapid retaliatory duties by Beijing on the same amount of USA exports to China.

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

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.

A man waits for the goods to be load on his tricycle at a dealer selling imported seafoods at the Jingshen seafood market in Beijing Thursday July 1
A man waits for the goods to be load on his tricycle at a dealer selling imported seafoods at the Jingshen seafood market in Beijing Thursday July 1

After a strong start to the year, growth in China's exports has moderated recently, and is expected to face more pressure from the initial round of United States tariffs.

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. Its trade surplus with the United States over the same period was $133.76bn, up from $117.51bn past year. "They are just a trade bully", he told reporters in Geneva.

While China continues to benefit from strong global demand for its goods for now, the rising trade tensions with the U.S. has the potential to hurt both sides.

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Others say the latest data shows how hard it will be for the USA to win the trade war, arguing that Americans want to buy Chinese-made products. The new tariffs would kick in within 60 days.

David Kuo, chief executive of the Motley Fool Singapore, said "US tariffs will increase the cost of Chinese imports but they are unlikely to deter USA consumers entirely".

Industrial metals copper, zinc and lead all slumped as much as 4 percent to their lowest levels in about a year over worries that the trade dispute could dent China's commodity-hungry economy.

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Mnuchin also said that the renegotiation of the North American Free Trade Agreement was a big priority for the administration now that Mexico's recent presidential election had passed.

China imported American goods worth $13.6 billion in June while exporting $42.6 billion to the United States.

Trump's advisers are attempting to open Chinese markets to foreign companies and reduce what they see as unfair subsidies that have given rise to a $340bn annual trade deficit with China.

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