China trade surplus with U.S. hits record high in June

Workers sort dried seafood for export at a factory in Lianyungang in China's eastern Jiangsu province on July 5

Workers sort dried seafood for export at a factory in Lianyungang in China's eastern Jiangsu province on July 5

The US trade deficit with China hit a record high in June, according to a Reuters analysis, despite President TrumpDonald John TrumpGiuliani: Trump interview with Mueller "further away" ACLU calls for Trump officials to hand over info on immigrant children Kushner to join Pompeo for meetings with Mexican leaders MORE's efforts to alter the trade relationship between the world's two largest economies.

China's exports rose 11.3% in June from a year earlier, compared with a 12.6% increase in May, customs data showed.

"Still, we do not expect a plunge because those tariffs only targeted $34 billion worth of goods which is fairly small compared to China's total trade", she said.

Others say the latest data shows how hard it will be for the United States to win the trade war, arguing that Americans want to buy Chinese-made products.

China's June trade grew by double digits amid mounting tensions with Washington but Beijing warned its exporters to face "rising instabilities and uncertainties".

Last week, the United States and China introduced tariffs of 25 percent on $34 billion of each other's exports. So far, encouraged by strong job growth and expectations of good quarterly earnings reports, U.S. markets have been strong and the Australian market has reached a 10-year record high.

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Analysts expect to see the impact of the tariffs in the coming months, warning of a less favorable trade balance for China. Our economy will be affected in two ways: through lower world economic growth and, more significantly, from a slowing down of the Chinese economy. Both official and private business surveys reported softer export orders last month.

China's foreign trade faces risks of slowing in the second half of the year, General Administration of Customs spokesman Huang Songping told a news conference, though he said Beijing was capable of handling challenges.

Imports grew 14.1 percent in June, customs said, missing analysts' forecast of a 20.8 percent growth, and compared with a 26 percent rise in May.

As the world's largest exporter, China has threatened retaliatory action against the tariffs and pledged that it would lodge a complaint with the World Trade Organization.

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.

In a sign Beijing is seeking alternative supplies of the commodities as it hit United States imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries. Its trade surplus with the United States over the same period was $133.76bn, up from $117.51bn previous year.

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