Published: Sat, October 13, 2018
Worldwide | By Angelina Lucas

China's trade surplus with the United States hit record highs in September

China's trade surplus with the United States hit record highs in September

China's trade surplus with the United States widened to a record in September despite wider application of USA tariffs, an outcome that could push President Donald Trump to turn up the heat on Beijing in their trade dispute.

When Mr Trump then extended those tariffs to a further $200 billion of goods in September, Beijing promptly hit back with tariffs on a further $60 billion of USA goods.

The measures are the latest salvo in a widening U.S. drive to pressure China, with the Trump administration recently slapping $250 billion in tariffs.

Now Mike Pence, the vice-president, has raised the stakes with a ferocious broadside against Beijing, accusing it of engaging in a military, economic and political campaign to...

China's trade surplus with the United States widened to a record $34.1 billion in September as exports to the US market rose by 13 percent over a year earlier despite a worsening tariff war.

"With global growth likely to cool further in the coming quarters and USA tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained".

China's export data has been surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer USA duties went into effect.

"We've been very clear with China that we need to have structural changes, that we need a reciprocal trading relationship and we should be able to increase our exports by hundreds of billions of dollars", he said.

The Chinese yuan has lost almost 10 per cent of its value against the dollar this year.

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Mnuchin met Thursday with Yi Gang, head of China's central bank. That prompted suggestions Beijing might weaken the exchange rate to help exporters. It also slashed China's growth forecast for next year to 6.2 percent from 6.4 percent.

Overall, China's global exports rose 14.5 percent over a year earlier, up from August's 12.2 percent growth.

These include a high bilateral trade surplus with the United States, a global current account surplus above three percent of gross domestic product and "persistent" one-way currency market intervention to weaken or prevent a rise in a country's currency. Investors are concerned that the trade war is dampening the outlook for profits as signs mount that American companies may not be able to deliver the growth in the third-quarter earnings season that has bolstered equities so far in 2018. Chinese leaders scrapped that deal after Trump's first tariff hikes hit.

Analysts said last month's strong export growth - which might indicate US tariffs are not biting much yet - is unlikely to be sustained.

"Prospects for significant progress toward de-escalation of their trade conflict are low in the short term", said Kuijs.

"They have lots to talk about".

Export restrictions on technologically advanced products also could lead to disruptions for some United States tech companies with extensive involvement in China.

"The trade-oriented industries are still vulnerable to further escalation of the tariff war", HSBC analysts Julia Wang and Aakanksha Bhat said in a research report on Friday.

Growth in China's factory sector in September stalled after 15 months of expansion, with export orders falling the most in more than two years, a private business survey showed.

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