China's trade surplus with the USA hit record highs in September

Lloyd Doyle
October 12, 2018

What started out as a trade war between the United States and China is showing alarming signs of escalating into a geopolitical war.

Lowered manufacturing output reported at the end of September in China indicates that the tariffs may be starting to bite Beijing.

China's trade surplus with the United States surged to a record high of $34.13 billion in September, compared with $31.05 billion in August, Chinese customs data showed on Friday.

China's trade surplus with the United States was $225.79 billion from January-September.

Notably, the September surplus with the USA was bigger than China's overall trade surplus of $31.69 billion for the month.

The on-going trade spat between the two world powers has taken its toll on the global economy.

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

The global economy might not be the only thing on the line if U.S. That prompted Mr Trump to threaten to extend the tariffs to nearly all China's $500 billion of exports.

China's September exports rose a solid 14.5 percent from a year earlier, well above expectations despite wider application of US tariffs and signs of shrinking export orders for Chinese companies. When President Trump first hit China with 25 per cent tariffs on $50 billion of exports in June, Beijing retaliated with $50 billion of tariffs of its own.

September exports rose 14.5 percent from a year earlier, the fastest pace since February, the customs data showed.

"The way the USA has structured the tariffs encourages frontloading because firms that know they're going to hit with tariffs would rather pay 10 percent than 25 percent", he said.

Trump accuses Beijing of engaging in unfair trade practices, including forced technology transfers and intellectual property theft.

"He won't be happy with these figures but it proves that tariffs don't help curb exports", Huo said.

Trump and Chinese president Xi Jinping have agreed to meet next month at the G-20 summit in Buenos Aires, in hopes of resolving their intensifying trade conflict. "You're not ready yet, '" he said Thursday.

"The front-loading impact is quite obvious to me", said Betty Wang, senior China economist at ANZ in Hong Kong. "Their economy has gone down very substantially".

Trump's strategy amounted to "bullying", said Yu Xiang, division of American economic studies at the China Institutes of Contemporary International Relations.

Indeed, analysts expect the trade imbalance to continue to widen over the next few months before the next round of American tariffs kick in, in no small part because the divergence in consumer demand in the two countries.

President Trump has warned China that Washington is taking measures to curb the exporting of nuclear technology to China, adding that Americans were not "stupid", AFP reports as the Department of Energy released yesterday a set of measures "to prevent China's illegal diversion of USA civil nuclear technology for military or other unauthorized purposes".

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.

Other reports by Iphone Fresh

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