China trade surplus with United States hits historic high & timing couldn’t be worse

Lloyd Doyle
July 13, 2018

June exports to the United States grew faster than China's total with the world, expanding by 13.6 per cent over a year ago in possible sign exporters were rushing to fill orders.

Chinese data released Friday showed that the United States trade deficit with China hit $28.97 billion in June, an increase of $4.39 billion from May, according to Reuters.

Over the first six months of the year the surplus climbed to $133.8 billion as total two-way trade continued to expand despite the face-off.

China's exports to the United States rose 13.6 percent in the first half of 2018 from a year earlier, while its imports from the USA rose 11.8 percent in the same period.

Thus far, China has imposed retaliatory tariffs on $34 billion-worth of US imports, targeting politically sensitive goods such as soybeans. That leaves about $80 billion for penalty tariffs after Beijing's previous increases either imposed or threatened on a total of $50 billion of US goods are counted.

China's trade imbalance is at the heart of US President Donald Trump's anger at what he describes as Beijing's unfair trade practices that are hurting American companies and destroying jobs.

Investors fear a prolonged trade battle with the United States could harm business confidence and investment, disrupting global supply chains and harming growth in China and the rest of the world.

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


China is running out of American goods for retaliatory tariffs due to their lopsided trade balance.

Against this overall background, Australia is in the fortunate position of avoiding a trade dispute with the U.S. and largely being spared from the impact of the new United States tariffs. Both official and private business surveys reported softer export orders last month as the trade row deepens.

The news came as the two economic superpowers stand on the brink of an all-out trade war that would have a huge negative impact globally.

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

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

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.

For January-June, it rose to $133.76 billion, compared with about $117.51 billion in the same period previous year.

Other reports by Iphone Fresh

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