Published: Fri, October 12, 2018
Money | By Ralph Mccoy

China's trade surplus with the U.S. hit record highs in September

China's trade surplus with the U.S. hit record highs in September

China's trade surplus with the United States surged to a record high of $34.13 billion in September, compared with $31.05 billion in August, Chinese customs data showed Friday.

The increase, the result of both increasing exports from China to the USA - up 14.5 percent from the same month a year ago - and a decline in the goods that China is buying from the U.S.

That's significantly higher than the $196 billion recorded between January and September past year.

An imbalance of trade is at the center of an increasing bitter dispute between the world's two biggest economies.

The United States and China imposed new tit-for-tat tariffs against each other's goods in late September, the latest escalation in a heated trade war between them.

While the data showed China's trade remained strong for the month, analysts forecast the trade war will begin to hurt in the coming months.

But the robust numbers reported on Friday by China's customs agency - the last ones from China before U.S. congressional elections on November 6 - could prompt a reaction from U.S. President Donald Trump.

After imposing tariffs on $50 billion worth of Chinese goods over the summer, the Trump administration last month added a 10 percent tariffs to another $200 billion worth of Chinese products, encompassing everything from household items like furniture and toys to industrial equipment.

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She cited a jump in exports of electrical machinery - the biggest export item from China to the USA - as a sign exporters might have pushed out shipments ahead of implementation of the latest tariffs on $200 billion in Chinese exports.

Just three years ago, the numbers were two and nine percent, respectively.

"With global growth likely to cool further in the coming quarters and United States tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained". Last month, Minister of Economic Affairs Shen Jong-chin (沈榮津) said at least 20 Taiwanese businesses were likely to relocate back to Taiwan from China after the tariffs were enforced.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

China's overall export growth accelerated, temporarily defying forecasts of a slowdown as the global economy and consumer demand cool. "Their economy has gone down very substantially".

In an interview on "Fox & Friends", Trump said his slapping billions of dollars of tariffs on Chinese goods has forced them to try to make a deal. "I don't want to do it but they have to come to the table", he warned.

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 has cited the trade war as one of the reasons it lowered its 2019 growth forecast for China, which is set to see its slowest expansion since 1990.

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