China’s June exports still solid, despite slight cooling
Overseas shipments little impacted by spat
China’s exports growth is expected to have cooled only slightly in June, possibly further boosting a trade surplus with the US in a test for Beijing as it tries to weather a volley of US tariffs on its goods that many fear could hamper its economy.
The Trump administration on Tuesday raised the stakes in its trade dispute with China, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items.
Given the fact that the most recent round of tit-for-tat tariffs went into effect only on Friday, there has been little impact on China’s overseas shipments to date.
“All in all, the trade impact of the first round of the tariff should have a very limited impact on China’s exports to the US, with a maximum loss of $5 billion,” Alicia Garcia Herrero, chief economist at Natixis Asia Research, wrote in a recently published note.
That view was backed by a Reuters poll of 39 economists, who forecast a Chinese exports growth of 10 percent year-onyear in June, cooling slightly from a 12.6 percent rise in the month before.
China’s Ministry of Commerce said last week that it would encourage exporters to develop new export markets and would also use funds collected from tariffs to ease the impact from US trade actions on local companies.
Imports growth was also expected to remain solid at 20.8 percent in June, the third straight month of 20-plus percent growth, albeit slowing again from the 26 percent surge in May.
There is also likely to be considerable focus on the USChina trade balance as US President Donald Trump rallies against China’s sizable surplus and demands the world’s No.2 economy takes measures to cut it.
The poll showed China’s overall trade surplus likely widened to $27.61 billion in June from $24.92 billion in May.
There was no separate forecast on China’s trade surplus with the US, which has continued to grow even as its total surplus has narrowed over the last two years.
China ran a $375 billion goods trade surplus with the US in 2017.