China’s exports post surprise growth in July despite dramatic escalation in US trade war

Exports grew by 3.3 per cent year-on-year in July, two full months after US President Donald Trump ratcheted up trade war tariffs on US$200 billion of Chinese goods

The data marks the anniversary of the US-China trade war, but does not factor in the latest threat of a 10 per cent tariff on US$300 billion of Chinese goods

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China’s overall trade surplus was US$45.06 billion in July, down from US$50.98 billion in June. This was ahead of the median poll by Bloomberg, which had predicted a balance of US$42.65 billion. Photo: EPA

Published: 11:20am, 8 Aug 2019Updated: 4:16pm, 8 Aug 2019

China’s external trade reported surprising stability in July, with exports growing 3.3 per cent and imports shrinking at 5.6 per cent, which was slower than analysts expected.

Exports, having dropped by 1.3 per cent in June, beat the median forecast of a Bloomberg poll of analysts who had suggested a 1.0 per cent decline. This is despite July being the second full month under which China’s exports to the United States faced a higher tariff of 25 per cent. July’s total exports were US$221.53 billion.

July was the only month in which exporters enjoyed a relative truce in trade war escalation, after President Xi Jinping and US counterpart Donald Trump agreed to a pause in new tariffs at the G20 summit in Osaka at the end of June.

Imports, meanwhile, fell by 5.6 per cent in July, according to data published by the General Administration of Customs in China on Thursday. This was above the analysts polled by Bloomberg, who had expected a 9 per cent slump. July’s total imports were US$175.47 billion

China’s overall trade surplus was US$45.06 billion in July, down from US$50.98 billion in June. This was ahead of the median poll by Bloomberg, which had predicted a balance of US$42.65 billion.

In a week when the trade war escalated and threatened to morph into a fully blown currency war, this was some good news for Beijing. It comes at a time when both the US and China seem to be entrenching their positions, gearing up for a bitter and sustained stand-off, indeed, President Xi has warned the Chinese people to expect a period of hardship.

More talks are expected to take place in Washington in September, but few harbour substantial hopes that a deal to end the trade war will come any time soon.