China's September trade surplus with US widens to record $34.13 billion

Lloyd Doyle
October 12, 2018

China's trade surplus with the USA jumped to a monthly record high of US$34.1 billion last month on the back of an escalating trade war that shows little sign of cooling, according to data released by China's customs administration on Friday.

China's record high surplus with the USA could add to tensions in the trade relationship between the world's two largest economies.

58 Years of What?

Chinese exports to the U.S. have at least temporarily defied forecasts they would weaken after being hit by punitive tariffs of up to 25 percent in a fight over American complaints about Beijing's technology policy.

But China's trade surplus with the United States grew 10 percent in September from a record $31 billion in August, according to China's customs administration.

The move comes as the U.S. is waging a trade war against China, with roughly half the products China sells to the USA each year now facing tariffs.

The reports were followed by remarks from senior Washington officials that China was the greatest threat to US democracy and security.

Export numbers have been buoyed by producers rushing to fill orders before American tariffs rose, but they also benefit from "robust US demand" and a weaker Chinese currency, which makes their goods cheaper overseas, said Louis Kuijs of Oxford Economics in a report.

China posted a larger trade surplus of $31.69 billion for the month.

Analysts said last month's strong export growth - which might indicate USA tariffs are not biting much yet - is unlikely to be sustained.

"We will watch for downside risks to China's exports" in the fourth quarter, Wang said.

Analysts had expected imports to rise 15.0 percent, compared with August's 19.9 percent.

Economists warn that a protracted dispute will eventually stunt growth not just in the US and China but across the broader global economy.

"With global growth likely to cool further in the coming quarters and United States tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained", he said.

Yesterday, President Trump, as quoted by The Times, pledged to punish China for its perceived aggression against the United States, saying there was "a lot more to do" to China.

He said although the Chinese want to negotiate, he does not believe they are ready.

The US tariffs cover a broad range of Chinese consumer goods, while China's were aimed mainly at American liquefied gas, machinery and electric equipment.

They are also promoting settlements in rubles and yuan, bypassing the United States dollar and other Western currencies.

China's stock market has plunged this year but the trade war has also started to erode Trump's oft-touted U.S. stock gains, with the Dow Jones Industrial Average down more than five percent for the week.

The International Monetary Fund on Tuesday cut its global economic growth forecasts for this year and next, saying that the U.S-China trade war was taking a toll.

Other reports by Iphone Fresh

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