China’s exports to US ebb

Exporters to tap new markets to overcome tariffs

Declines in China’s exports to the US reflected concerns over the ongoing tit-for-tat trade war, and Chinese merchants are likely to shift their focus to markets such as Europe, Latin America and Southeast Asia, one expert said.

China’s exports to the US grew 5.4 percent year-on-year in the first half of 2018, but the growth rate has slowed by 13.9 percentage points, according to the General Administration of Customs.

From January to June, exports of electro-mechanical products increased 8 percent year-on-year, which accounted for 62.6 percent of China’s total exports to the US, official data showed. Meanwhile, the country recorded a 3.6 percent increase in automatic data processing equipment (ADPE) exports and a 5.5 percent rise in smartphones. However, exports in labor-intensive industries remained stable compared to the same period in 2017, within which exports of cloth and accessories dropped 1.8 percent.

ADPE and consumer products accounted for a large part of the ChinaUS trade volume, said Huo Jianguo, a senior research fellow at the Center for China and Globalization. Recent declines in exports of those products showed that exporters have been adjusting their orders as the deadline for higher tariffs draws nearer.

US President Donald Trump will impose additional 25 percent tariffs on 818 Chinese imports worth about $34 billion starting from Friday.

Responding to the tariffs, China’s foreign ministry spokesman Lu Kang said on Tuesday that the Chinese government is obligated to defend the legal rights and interests of its domestic industry and consumers.

“China is prepared for the [tariff list] and will take all necessary measures to defend the country’s national interests and people’s interests,” Lu noted. In June, China’s ADPE exports to the US declined 6.6 percent year-on-year.

“The demand in the US market for Chinese goods is strong, but merchants are afraid of making orders due to upcoming duties,” Huo said.

China’s trade surplus with the US rose 13 percent year-on-year to 1.87 trillion yuan ($288 billion) in 2017.

“This is a two-way impact, as US imports will come down due to rising duties. The US may find third party markets to replace China. But American consumers will pay higher prices for those products,” Huo said. Chinese exporters can always find alternative markets such as Central Europe, Latin America and Southeast Asia, to replace the US, he noted.