China's trade surplus widens in June as imports drop

China is hitting the US where it hurts soybeans

China is hitting the US where it hurts soybeans

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

The data came after the administration of U.S. President Donald Trump raised the stakes in its trade row with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items.

June exports to the United States grew faster than China's total with the world, expanding by 13.6 per cent over a year ago in possible sign exporters were rushing to fill orders.

China's trade surplus widened sharply amid escalating trade tensions with the US, which is preparing to impose fresh tariffs on a further $200 billion in Chinese goods.

"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.

Trump's latest tariffs threat hammered global markets, while there are worries that his decision to pick fights with other key allies including Canada and the European Union could fuel an all-out global trade war.

Analysts expect to see the impact of the tariffs in the coming months, warning of a less favorable trade balance for China. So far, encouraged by strong job growth and expectations of good quarterly earnings reports, United States markets have been strong and the Australian market has reached a 10-year record high.

Against this overall background, Australia is in the fortunate position of avoiding a trade dispute with the U.S. and largely being spared from the impact of the new USA tariffs.

But comments from China's commerce ministry indicated that June's figures are a blip, a result of Chinese companies pushing to get products out the door before the tariffs went into effect, according to Reuters.

Investors fear a prolonged trade battle with the United States could harm business confidence and investment, disrupting global supply chains and harming growth in China and the rest of the world. China's exports to the United States jumped by 13.6% in the first half of 2018 from a year earlier, while its imports from the U.S. rose 11.8% in the same period.

But in a statement from its commerce ministry, China blamed those problems on the USA, saying the imbalance was "overestimated" and caused by America's own "domestic structural problems".

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.

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

Growth in imports for June showed a moderate slowdown from May, official data showed on Friday.

"We expect the trade numbers for July to disappoint since that's when the first round of United States tariffs took effect", China analyst at Nordea Bank in Singapore Amy Zhuang told the BBC.

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