China's 2018 trade surplus with US peaks to $323.32 bn
14 January 2019
China's trade surplus with the United States rose to $323.32 billion in 2018, the highest since 2006, despite a decline in China’s exports, which could prompt President Donald Trump to take even harsher measures to stem imports from China.
A 17.32 per cent increase in China’s trade surplus with the United States from about $275.81 billion in 2017 to $323.32 billion in 2018 and a meagre 0.7 per cent increase in its imports from the US could worsen an already bitter trade war between the two countries.
Despite curbs on each other’s imports and the tit-for-tat tariff war, China's exports to the US rose 11.3 per cent last year, while China’s imports from the US only increased 0.7 per cent.
China's large trade surplus with the US has long been a sore point with Washington, and is at the centre of a bitter dispute between the world's biggest economies.
China’s exports, meanwhile, fell the most in two years in December, while imports also contracted, amidst US trade curbs and deteriorating global demand.
Slack demand in China has hurt US sales of iPhones to automobiles from the US, prompting warnings from the likes of Apple and from Jaguar Land Rover, which last week announced sweeping job cuts.
The dismal December trade readings suggest US might have bought less from China amidst the hike in import tariffs although US sales to China slumped.
China, with its cheap goods, however, can find markets for its goods elsewhere while the US may find it difficult to push its costly products elsewhere.
The fact is Beijing’s exports have been more resilient to tariffs compared to US exports that are already high-cost. Also, Chinese companies ramped up shipments before broader and stiffer US duties went into effect.
Some analysts had already speculated that Beijing may have to speed up and intensify its policy easing and stimulus measures this year after factory activity shrank in December.
China’s December exports unexpectedly fell 4.4 per cent from a year earlier, with demand in most of its major markets weakening. Imports also saw a shock drop, falling 7.6 per cent in their biggest decline since July 2016.
China’s total global exports rose 9.9 per cent in 2018, its strongest performance in seven years, while imports increased 15.8 per cent.