China’s exports feel the pinch of US tariffs, trade tensions
China’s exports grew last month but at a slower pace than in recent months, the country's customs agency said Monday.
Exports reached $321.8 billion in August, a 4.4% increase compared to the same month last year. That was down from a 7.2% jump in July. Meanwhile, imports totalled $219.5 billion, a 1.8% rise.
China's large trade surplus has become a contentious issue with major trading partners, including the US and the European Union. Low-priced Chinese imports are a boon for consumers but can lead to job cuts in manufacturing.
In the first eight months of the year, China exported $785.3 billion more in goods than it imported from other countries, the monthly customs data showed.
President Donald Trump has imposed 30% additional tariffs on imports from China since taking office early this year. He backed down from even higher tariffs after China retaliated with import taxes of its own. The two countries are in talks to try to reach a trade agreement.
The tariffs from both sides and the possibility that they could be raised again are having an impact on two-way trade. Chinese exports to the US plunged 33% in August to $47.3 billion, while its imports from the US dropped 16% to $13.4 billion.
Exports to the EU rose 10.4% to $46.8 billion, while imports from the 27-member bloc edged down slightly to $22.8 billion.
Overall, China’s exports grew at the slowest pace since the January-February period, when they rose just2.3%. The first two months of the year are reported together to smooth out distortions from the long Lunar New Year break.
China’s exports of rare earths rose on a monthly basis to $55 million in August, up from $41 million in July, but down 25.6% compared to the same month last year.
Rare earth magnets, which can withstand high heat, are vital to many products, including washing machines, cars and fighter jets.
China dominates the global market for processing rare earths, and a clampdown on their export in April temporarily halted production at some factories in Europe and the US and raised fears of shutdowns at others.
The issue became a focal point of a round of US-China trade talks in London in June. China agreed to approve more export permits for rare earths in return for the US lifting curbs on the sale of chip design software and jet engines to China.
(Source: Associated Press)
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