Friday, 20 September, 2019

China's exports fall as shipments to USA slump amid tariff war

Chart shows Trump's imposed tariffs on China since July 2018 Chart shows Trump's imposed tariffs on China since July 2018
Deanna Wagner | 11 September, 2019, 10:30

While to the north, Canada on July 1 imposed tariffs on $12.6 billion worth of USA goods, including steel, aluminum, coffee, ketchup and bourbon whiskey in retaliation for United States tariffs on Canadian steel and aluminum.

China has allowed the yuan to decline below 7 a dollar, prompting the U.S.to name it a currency manipulator. "Meanwhile, the global trade weakness looks set to linger, which will continue to weigh on demand for China's exports".

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.

The trade war between the world's two largest economies - now over a year old - is weighing on global growth.

Sluggish domestic demand was likely the main factor in the decline, along with softening global commodity prices. In recent months, China's exports to the United States, Europe, South Korea, Australia and Southeast Asia have declined.

On September 1, the United States imposed a 15% levy on more than $125 billion in Chinese imports including smart speakers, Bluetooth headphones, books, babies' nappies and many types of footwear. China's domestic consumption and investment have stayed weak despite more than a year of growth-boosting measures.

China's global exports fell 3% to $214.8 billion, while imports were up 1.7% at $180 billion. Analysts had forecast a surplus of US$43-billion for August. China's trade surplus and its technology development strategy will be discussed in the meeting. Beijing hit back with retaliatory levies, and let its yuan currency fall sharply to offset some of the tariff pressure.

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US President Donald Trump (L) and China's President Xi Jinping leave a business leaders event at the Great Hall of the People in Beijing.

But there was no indication that any planned tariffs on Chinese goods would be halted, and markets expect a lasting peace between the two countries to be more elusive than ever.

"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.

Many analysts expect export growth to slow further in coming months, with more United States tariff measures due to take effect on 1 October and 15 December. -China trade talks in September and October, but cautioned the trade conflict could take years to resolve.

US and Chinese negotiators are preparing for talks in October over Beijing's trade surplus and complaints about its technology development tactics.

"The global economy is approaching the turning point of a recession, and external demand will, for sure, become worse and worse", Morgan Stanley Huaxin Securities' Mr Zhang said.