Chinese exports accelerate even as Trump escalates trade conflict

Beijing warns against raising stick of hegemony over tariffs

BEIJING, Aug 8, (RTRS): China’s exports surged more than expected in July despite US duties and its closely watched surplus with the United States remained near record highs, as the world’s two major economic powers ramped up a bitter dispute that some fear could derail global growth.

In the latest move by President Donald Trump to put pressure on Beijing to negotiate trade concessions, Washington is set to begin collecting 25 percent tariffs on another $16 billion in Chinese goods on Aug 23.

Wednesday’s Chinese data provide the first readings of the overall trade picture for the world’s second-largest economy since US duties on $34 billion of Chinese imports came into effect on July 6.

All the same, China’s exports for July rose a bigger than expected 12.2 percent year-on-year, showing little tariff impact for now and beating June’s 11.2 percent rise and analysts expectations in a Reuters poll for 10 percent growth.

Of more direct consequence in the Sino-US trade war, China’s surplus with the United States shrank only marginally to $28.09 billion last month from a record $28.97 billion in June. Washington has long criticised China’s trade surplus with the United States and has demanded Beijing cut it.

Those demands could get even more strident if the yuan’s sharp drop in recent months raises the ire of the United States, which has in the past repeatedly criticised Beijing for manipulating its currency to gain an unfair trade advantage.

Economists say China appears to be taking a more hands-off approach to the yuan, which marked its worst 4-month fall on record between April and July and has provided some reprieve for exporters in the face of the rising trade tensions.

ANZ senior China economist Betty Wang said Beijing will likely resist using its closely managed currency as a tool in the trade war.

“Currency devaluation, which may have helped exports to some extent, has been largely market-driven in our view and is not a preferred policy tool by Chinese policy makers as part of the retaliation measures,” Wang said.

China’s trade with the US also continued to rise in July despite the tariffs, with exports up 11.2 percent year-on-year, and imports increasing 11.1 percent.

Analysts still expect a less favourable This photo shows bags of chemicals being unloaded at a port in Zhangjiagang in China’s eastern Jiangsu province. China’s trade surplus with the United States eased in July, when President Donald Trump imposed stiff tariffs on billions of dollars worth of Chinese goods in a showdown between the world’s two biggest economies. The figures on August 8 come as the two exchange threats of further measures, which have fuelled

fears of a trade war many observers warn could hammer global business. (AFP)

overall trade balance for China in coming months given it’s early days in the tariff brawl.

After a strong start to the year, growth in the world’s second-largest

economy cooled slightly in the second quarter, partly hit by the government’s years-long efforts to tackle debt risks.

China’s imports rose 27.3 percent year-on-year in July, in a sign domestic

demand remains solid, but the worry is that the escalating Sino-US trade war, rising corporate bankruptcies, and a steep decline in the yuan could put a significant dent on the economy.