China-US surplus hits record, adding fuel to trade war
China’s trade surplus with the United States ballooned to a record $34.1 billion in September, despite a raft of U.S. tariffs, official data showed on Oct. 12, adding fuel to the fire of a worsening trade war.
The world’s top two economies imposed new tariffs on a massive amount of each other’s goods mid-September, with the U.S. targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of U.S. goods.
Exports jumped 14.5 percent for September on-year, beating forecasts from analysts polled by Bloomberg News, while imports rose 14.3 percent on-year.
“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan),” said Julian Evans-Pritchard, China economist at Capital Economics.
“With global growth likely to cool further in the coming quarters and U.S. tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained,” he said.
“I have a lot more to do if I want to do it. I don’t want to do it but they have to come to the table,” he warned.
The yuan has fallen for weeks against the U.S. dollar, dropping nine percent in the past six months, which mitigates the rise in the price of Chinese goods caused by punitive US tariffs.
U.S. Treasury Secretary Steven Mnuchin, in comments published in the Financial Times this week warned China against engaging in competitive currency devaluations.
China has steadfastly denied that it has manipulated the yuan to cope with the tariffs. The U.S. dollar has strengthened against a range of currencies this year as American interest rates have risen.
China’s stock market has plunged this year but the trade war has also started to erode Trump’s oft-touted U.S. stock gains, with the Dow Jones Industrial Average down more than five percent for the week.
The IMF also lowered estimates for the United States and the global economy as a whole.