China’s surplus with the US hit a record last month, data showed yesterday, adding to brewing tensions between the economic superpowers as they stand on the brink of an all-out trade war that Beijing warned would have a “negative impact” globally.
The figures come after the two sides exchanged tit-for-tat tariffs on billions of dollars worth of goods and US President Donald Trump threatened to up the ante with measures on a further US$200 billion of Chinese imports.
Beijing said China’s surplus with the US hit an all-time high of US$28.97 billion last month, while exports to the country hit a record US$42.62 billion.
Over the first six months of the year the surplus climbed to US$133.8 billion, up 13.8 percent from last year, as total two-way trade continued to expand despite the face-off.
The imbalance is at the heart of Trump’s anger at what he describes as Beijing’s unfair trade practices that are hurting US companies and destroying jobs.
However, in a statement from its Ministry of Commerce on Thursday, China blamed those problems on the US, saying the imbalance was “overestimated” and caused by the US’ own “domestic structural problems.”
“This trade dispute will definitely have an impact on China-US trade and will have a very negative impact on global trade,” Chinese General Administration of Customs spokesman Huang Songping (黃頒平) said at a briefing yesterday.
The spiralling battle with Beijing shows no signs of cooling down, and observers warn the impact will begin to hurt soon as China’s economy struggles with slowing growth — and just as leaders try to battle a worryingly large debt mountain.
“Looking ahead, export growth will cool in the coming months as US tariffs start to bite alongside a broader softening in global demand,” Julian Evans-Pritchard of Capital Economics said.
Beijing will back away from its war on debt and roll out policy-easing measures, China economist at Nomura investment bank Ting Lu (陸挺) said in a research note, as it faces potential trade war fallout and a domestic slowdown proving to be worse than expected.
“We expect [economic] growth to slow noticeably” in the second half of the year, he said.
Chinese exports climbed 11.3 percent year-on-year last month, beating a Bloomberg News forecast of 9.5 percent, while imports increased 14.1 percent, below the forecast 21.3 percent.
Last month’s upswing might have been caused by exporters shipping their goods early to beat the scheduled tariffs, analysts said, with the trade fight expected to further impact such data in coming months.
Beijing has instructed companies to look for imports beyond the US, and this week an official at China’s largest grain trader said it hoped to diversify away from US soybeans to those grown in South America and Eastern Europe.
China’s overall surplus continued to shrink, falling 24.5 percent on-year for the first six months, with customs saying it has shrunk for the past eight quarters.
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