China’s exports hold up despite US tariffs
BEIJING: China’s exports to the United States and the rest of the world saw a surprise jump in October, data showed on Thursday, suggesting businesses are ramping up trans-Pacific shipments before higher tariffs kick in.
Relations between the world’s top two economies have soured sharply this year as US President Donald Trump slapped higher taxes on roughly half of Chinese imports and threatened to hit the other half.
Top Chinese officials are currently in Washington, with hopes that those talks could pave the way for a breakthrough on trade later this month when Trump meets Chinese President Xi Jinping at the G20 summit in Argentina.
Still, in October exporters continued to hurry goods across the Pacific, with China’s exports to the US surging 13.2 per cent from the same period last year, according to the data released by China’s customs administration.
“October’s surprisingly strong export performance seems to have been partly due to a continuous front-loading effect and is unlikely to be a long-term trend,” said Betty Wang, China economist at ANZ.
China’s trade surplus with the US fell to $31.8 billion in October, from a record $34.1bn in September.
October marked the first full month of US tariffs on $200bn of Chinese goods — but the tax rate is set to jump from 10pc to 25pc come January.
Trump has repeatedly boasted the US could not lose a trade war with China, but Beijing’s retaliatory tariffs on American goods have been more damaging to trade so far.
China’s imports from the US fell 1.8pc in October on-year, while its surplus with the US expanded to $258bn for the first 10 months of the year.
A weakening yuan, which has slipped about ninepc against the dollar from its January high, has helped offset the extra tariff costs on Chinese products.
Analysts are not optimistic the upcoming meeting between the two heads of state will resolve the friction.
“We do not expect the sideline meeting of Xi and Trump during the G20 would be positive,” said Iris Pang of ING Bank.