China's June exports jump, surplus with USA at record high

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Beijing announced Friday that China's surplus with the United States hit an all-time high of $28.97 billion (€24.85 billion) in June, with exports reaching a record $42.62 billion in June.

China's trade surplus with the United States, which is at the center of the tariff tussle, widened to a record monthly high of $28.97 billion, up from $24.58 billion in May, according to Reuters calculations based on official data going back to 2008.

The difference between China's exports to the USA and its imports from the world's largest economy expanded to a monthly high of $29bn (£22bn), up from $24.6bn in May.

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.

The figures come a week after the trade war between the two began, with the United States imposing tariffs on $34bn of Chinese goods, and China retaliating. That leaves about $80 billion for penalty tariffs after Beijing's previous increases either imposed or threatened on a total of $50 billion of USA goods are counted.

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

China's June trade grew by double digits amid mounting tensions with Washington but Beijing warned its exporters to face "rising instabilities and uncertainties".

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

Analysts expect to see the impact of the tariffs in July's figures.

US President Donald Trump had already threatened to impose additional tariffs if China - the world's largest exporter - retaliates. China is running out of American goods for retaliatory tariffs due to their lopsided trade balance. The new tariffs would kick in within 60 days. "Not only will Chinese exporters suffer but American consumers as well", she said.

David Kuo, chief executive of the Motley Fool Singapore, said "US tariffs will increase the cost of Chinese imports but they are unlikely to deter USA consumers entirely".

China imported American goods worth $13.6 billion in June while exporting $42.6 billion to the United States.

However, a lower yuan would make it more expensive for China to import USA goods. The sign added: "The US provoked a trade war, we vow to accompany it to the end!"

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