Published: Fri, July 13, 2018
Business | By Tara Barton

China's trade surplus widens in June as imports drop

China's trade surplus widens in June as imports drop

China's monthly trade surplus with the USA hit a record high of almost $29bn (£22bn) in June as exports to America remained strong.

In the first half of the year, Chinese exports to the US increased 13.6 percent as compared to the same period in 2017, while imports from the USA only rose 11.8 percent.

"Still, we do not expect a plunge because those tariffs only targeted $34 billion worth of goods which is fairly small compared to China's total trade", she said.

Official data shows China's monthly trade surplus with the United States was almost 29-billion-dollars.

Analysts expect to see the impact of the tariffs in the coming months, warning of a less favorable trade balance for China.

Thus far, China has imposed retaliatory tariffs on $34 billion-worth of USA imports, targeting politically sensitive goods such as soybeans.

The data comes as President Trump has ratcheted up a trade war with China and other close American trade partners, including Canada, Mexico and the European Union.

Last Friday, Trump rolled out 25% tariffs on $34 billion of Chinese goods.

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

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The dispute has jolted global financial markets, raising worries a full-scale trade war could derail the world economy. Both official and private business surveys reported softer export orders last month as the trade row deepens.

"There will be challenges facing foreign trade with rising instabilities and uncertainties in the global environment, " said a Chinese customs agency report.

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

Imports grew 14.1 percent in June, customs said, missing analysts' forecast of a 20.8 percent growth, and compared with a 26 percent rise in May.

But, he said, China has another option - Beijing could reduce the impact of USA tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.

The spiraling battle between Beijing and Washington shows no signs of cooling down.

Separate customs data on Friday showed imports of commodities from soybeans to crude oil eased compared with a year ago, but China's steel mills and aluminium smelters sold much more overseas spurred by higher global prices amid growing concerns about slowing demand growth.

"So we would be back to square one", Mr Kuo said, with China exporting more to the United States than it buys from the country.

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