Trade War: The escalation of the trade war on the cards while China's trade surplus in June with the United States beats its record

BEIJING: China's trade surplus with the United States reached a record high in June, as its exports accelerated widely, which could further aggravate a bitter trade dispute with Washington.

The data came after the administration of US President Donald Trump on Tuesday raised the stakes of his trade dispute with China, stating that he would impose 10 percent tariffs on an additional $ 200 billion of Chinese imports.

China's trade surplus with the United States, which is at the center of the customs fight, has widened to $ 28.97 billion, up from $ 24.58 billion in May , according to Reuters calculations based on official data dating back to 2008.

Trump demanded that Beijing cut its trade surplus with the United States, and the latest result could further exacerbate trade tensions after the two parties imposed tariffs last week on $ 34 billion worth of goods. Washington warned that it could eventually charge more than $ 500 billion worth of Chinese goods – almost the total US imports from China last year.

The conflict shook the global financial markets, raising concerns that a large-scale trade war could derail the global economy. Chinese stocks have fallen into the territory of the bear market and the yuan currency has slipped, although there have been signs in recent days that its central bank is moving to slow currency declines.

China's June exports grew 11.3% over the previous year, exceeding expectations of a 10% increase according to the latest Reuters poll of 39 badysts, up from 12.6%. % in May.
"In the future, export growth is expected to slow down in the coming months as US tariffs begin to bite into a broader slump in global demand," writes Julian Evans-Pritchard, Senior Economist at Capital Economics in London. Singapore. noted a weaker yuan should help offset some of the decline.

RISKS OF EXPORTATION

After a good start to the year, Chinese export growth has been moderated recently and is expected to face increased pressure from the first round of US tariffs. Both official and private business surveys have reported a decline in export orders last month as trade intensified.
China 's foreign trade may slow down in the second half of the year, said the spokesman of the General Administration of Customs, Huang Songping, during a press conference, adding that Beijing was able to meet the challenges.

Analysts expect delivery growth to slow in the second half of the year, putting more pressure on an economy already in the grip of a multi-year debt battle that has driven up costs borrowing companies.

Investors fear that a prolonged trade battle with the United States will hurt business confidence and investment, disrupting global supply chains and hurting growth in China and in the rest of the world.

The Chinese Ministry of Commerce confirmed last month that Chinese exporters were front-loading shipments to the United States ahead of expected rates – a situation that could worsen any slowdown in shipments by the end of the year. ;year.

Imports rose 14.1 percent in June, according to Customs, missing the badysts' forecast of a 20.8 percent growth, and compared to a 26 percent rise in May.

The Commerce Department also said this week that it will use funds raised from tariffs on imports from the United States to help mitigate the impact of US commercial actions on imports. Chinese companies and their employees.

The Ministry encouraged companies to increase imports of soybeans, soy flour, vehicles and aquatic products from other markets.

In a sign that Beijing is seeking other supplies of commodities by hitting US imports with additional tariffs, China has dropped import duties on a range of ingredients from Animal feed from several Asian countries.

HIGH SCHOOL TRADE EXECUTIVE

China's exports to the United States increased by 13.6% in the first half of 2018 compared to the previous year, while that its imports from the United States increased by 11.8% during the same period.

Separate data show that Chinese shipments to US ports increased more than expected in June, suggesting that some retailers have increased their orders to protect themselves from an intensified trade war that threatens to increase costs on a growing number of consumer products.

From January to June, China's trade surplus with the United States amounted to $ 133.76 billion, compared with $ 117.51 ​​billion in the same period last year. last year.

China recorded a trade surplus of $ 41.61 billion for the month, compared with a surplus of $ 27.61 billion in June and a surplus of $ 24.92 billion in May. The surplus was the highest in China since December.