Published: Sun, July 15, 2018
Money | By Ethel Goodwin

China's trade surplus with United States swells in June

China's trade surplus with United States swells in June

The figures come a week after the trade war between the two began, with the United States imposing tariffs on $34bn of Chinese goods, and China retaliating.

In turn, the Trump administration accused China of not negotiating "seriously" on trade and released on Tuesday a list of $200 billion worth of Chinese exports that could be subject to new 10-percent tariffs.

However, analysts said the June figures were a sign that exporters rushed to beat the initial tranche of tariffs, which came into effect in the first week of July.

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

US President Donald Trump had already threatened to impose additional tariffs if China - the world's largest exporter - retaliates.

China's exports rose 11.3% in June from a year earlier, compared with a 12.6% increase in May, customs data showed.

Gold slipped to seven-month lows and Treasury prices rose after the Federal Reserve reinforced views of strong US economic growth in a report to Congress, reinforcing expectations of higher interest rates. Its trade surplus with the USA over the same period was $133.76bn, up from $117.51bn a year ago. The new tariffs would kick in within 60 days.

"There will be challenges facing foreign trade with rising instabilities and uncertainties in the global environment, " said a Chinese customs agency report.

"Targeting such a large amount of basic consumers will inevitably have an effect on U.S. inflation".

In yuan terms, China's exports grew 3.1% in June and imports rose 6.0%.

In a sign Beijing is seeking alternative supplies of the commodities as it hit United States imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries.

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.

Others say the latest data shows how hard it will be for the U.S. to win the trade war, arguing that Americans want to buy Chinese-made products.

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