China's trade with US shrinks as tariff war worsens

China Trade

Last month saw dramatic escalations in Beijing's bitter year-long trade row with Washington, as the United States announced 15 per cent tariffs on a wide range of Chinese goods from Sept 1.

Investors were unsettled by a report officials were struggling to agree on a schedule.

China has taken a series of other retaliatory measures against the US, canceling purchases of soybeans, which is the biggest USA export to China, while imposing or announcing penalties on roughly $120 billion of USA imports.

Exports to Europe, South Korea, Australia and ASEAN member states also worsened on an annual basis, compared with July, while shipments to Japan and Taiwan posted slightly better growth than the previous month.

The growth slowed from a rise of 6.7 percent for exports in the first seven months and an increase of 1.3 percent for imports.

Sluggish domestic demand was likely the main factor in the fall, along with softening global commodity prices.

Trade war between two of the world's top economies China and the United States continues.

The weak growth represents a slowdown of 12.6 percentage points from that experienced by Chinese trade in the same month a year ago.


Exports fell to just over $214 billion, while imports fell 5.6 per cent to just under $180 billion, figures from the Beijing statistics office showed.

The trade surplus was 239.6 billion yuan, 33.3 per cent higher than recorded in August 2018. Beijing hit back with retaliatory levies, and let its currency fall sharply to offset some of the tariff pressure.

Appearing on CNBC, Kudlow said President Donald Trump believes the Chinese want to make a deal and that talks are continuing.

The Chinese government has agreed to narrow its trade surplus with the US but is reluctant to give up development strategies it sees as a path to prosperity and global influence.

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"Some cargoes from the United States did not get loaded earlier and only cleared customs in August", said Xie Huilan, analyst with industry portal Cofeed.com before the data was released. For the first eight months of 2019, exports were off 1% from a year earlier and imports were down 5.6%.

China's trade surplus with the USA shrunk to $31.3 billion in August, down $27 billion from a year prior. -China trade talks in September and October, but cautioned the trade conflict could take years to resolve.

"The global economy is approaching the turning point of a recession, and external demand will for sure become worse and worse", said Steven Zhang (章俊), chief economist and head of research at Morgan Stanley Huaxin Securities Co Ltd (摩根士丹利華鑫證券).

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