The data could potentially prolong and deepen the ongoing trade war.
Official data from the U.S. shows, Beijing’s exports to the United States, have unexpectedly risen to record highs. China’s trade surplus with the U.S. peaked in June and could potentially make the trade dispute even more bitter.
The release of the data comes in the wake of the Trump Administration raising the stakes in the trade war with China saying it would slap 10% tariffs on Chinese imports, including consumer items, worth $200 billion.
China’s exports to the U.S. in June rose by 11.3%, when compared from a year earlier, beating forecasts analysts’ forecast of a 10% rise. In May its exports had risen by 12.6%.
Chinese exports are expected to face more U.S. pressure as the trade war deepens.
According to Huang Songping, spokesman for China’s General Administration of Customs, foreign trade is likely to slowdown in the second half of the year. Analysts also expect shipments to slow down in the second half of the year which will put more strain on its economy which is already feeling the pinch of battling multi-year debts that have been driven up by corporate borrowing costs.
A prolonged trade war with the United States is likely to significantly impact China’s business confidence and investment scene.
Last month, China’s ministry of commerce confirmed that Chinese exporters were “front-loading shipments” to the United States to get ahead of expected tariffs – a situation that could exacerbate any slowdown in shipments toward the year-end.
In June China’s imports grew by 14.1% missing analysts’ forecast of a 20.8%.
Earlier this week, the Chinese Ministry of Commerce stated, it will use funds collected from tariffs charged on imports from the U.S. to help ease the impact of U.S. trade actions on Chinese companies and their employees. It is also encouraging companies to increase their import of soymeal, soybean, aquatic products and vehicles, from other markets.
In a move that signals Beijing search for alternative supplies of commodities that have been hit by U.S. tariffs, it has reduced import tariffs on a range of animal feed ingredients from several Asian countries.
Trump has warned that ultimately he may impose tariffs on Chinese imports worth more than $500 billion which is nearly the total amount the U.S. imported from China in 2017.
Incidentally, Beijing registered a trade surplus of $41.61 billion in June compared to analysts’ forecasts of $27.61 billion. This was its highest surplus level since December 2017.