Economy

China's Trade Surplus With the USA hits record high

China's Trade Surplus With the USA hits record high”

Beijing announced Friday that China's surplus with the United States hit an all-time high of $28.97 billion (€24.85 billion) in June, with exports reaching a record $42.62 billion in June.

Chinese data released Friday showed that the U.S. trade deficit with China hit $28.97 billion in June, an increase of $4.39 billion from May, according to Reuters.

This is the highest surplus in any month since 1999.

"We expect the trade numbers for July to disappoint since that's when the first round of USA tariffs took effect", China analyst at Nordea Bank in Singapore Amy Zhuang told the BBC. Washington has warned that it may ultimately impose tariffs on more than 500-billion-dollars worth of Chinese goods.

China's Commerce Ministry said that Beijing had no choice but to fight back after the United States "launched the largest trade war in economic history", accusing Washington of violating the rules of the World Trade Organization (WTO).

China's commerce ministry has said the two sides are not discussing restarting trade negotiations, and renewed its pledge to "strike back" against Washington's latest threat to slap $200 billion of Chinese imports with new 10% taxes.

But, he said, China has another option - Beijing could reduce the impact of USA tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.

"Looking ahead, export growth will cool in the coming months as U.S. tariffs start to bite alongside a broader softening in global demand", Capital Economics analyst Julian Evans-Pritchard said in a statement. Both official and private business surveys reported softer export orders last month.

"There will be challenges facing foreign trade with rising instabilities and uncertainties in the global environment, " said a Chinese customs agency report. The politically volatile trade surplus with the United States widened by 14.2 per cent to $29 billion.

Growth in imports for June showed a moderate slowdown from May, official data showed on Friday.

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.

The commerce ministry also said this week it will use funds collected from tariffs charged on imports from the USA to help ease the impact of United States trade actions on Chinese companies and their employees.

In a sign Beijing is seeking alternative supplies of the commodities as it hit USA imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries. China is running out of American goods for retaliatory tariffs due to their lopsided trade balance.



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