China’s exports last month surged more than expected, despite fresh US duties, and its closely watched surplus with the US remained near record highs, as Washington finalized its new tariff list.
In the latest move by US President Donald Trump to put pressure on Beijing to negotiate trade concessions, Washington is set to begin collecting 25 percent tariffs on another US$16 billion in Chinese goods on Aug. 23.
China has repeatedly said it would strike back and has already begun enforcing or is getting ready to enforce its own retaliatory tariffs, saying that the US is threatening the global free-trade order with its protectionism.
Photo: AFP
The headline numbers are the first reading of China’s overall trade picture since US duties on US$34 billion of Chinese imports came into effect on July 6.
China’s surplus with the US last month shrank marginally to US$28.09 billion from a record US$28.97 billion in June.
Still, disagreements between the two nations run deeper than just the trade balance — tensions remain over market access, intellectual property, technology transfer and investment.
A weaker yuan, which marked its worst four-month fall on record between April and last month, might have taken the sting out of 25 percent tariffs on US$34 billion exports to the US.
However, analysts still expect a less favorable trade balance for China in the coming months given that the brawl is in its early days.
“Looking ahead, we expect export growth to cool in the coming months, although this will primarily reflect softer global growth rather than US tariffs, the direct impact of which will continue to be mostly offset by the renminbi’s [yuan’s] recent depreciation,” Capital Economics senior China economist Julian Evans-Pritchard wrote in a note.
Chinese state media has said China would not be cowed in the face of US threats.
The latest commentary by Xinhua news agency yesterday took a softer line after resorting to personal attacks against Trump earlier in the week, saying that China could get through the storm, but refrained from directly mentioning the US president.
All of China’s main state newspapers published the commentary titled “Declaration” on their front pages.
“Certain people go against the tide for their own private ends and go against morality; the barrier of tariffs wantonly rise and the stick of hegemony is raised all around,” the commentary said.
“Although this may for a moment bring preening with delight, it will make it hard to resolve economic imbalances or out-of-kilter politics and other deep-rooted problems,” it added.
The latest US$16 billion list from the US would hit semiconductors from China, even though many of the basic chips in these products originate from Taiwan, the US or South Korea.
Semiconductor Industry Association president and CEO John Neuffer said in a statement that it is disappointed and puzzled why semiconductors remain on the final tariff list.
“We have made the case to the administration, in the strongest possible terms, that tariffs imposed on semiconductors imported from China will hurt America’s chipmakers, not China’s, and will do nothing to stop China’s problematic and discriminatory trade practices,” he said.
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