Economy

China defies Trump tariffs, trade surplus soars

China defies Trump tariffs, trade surplus soars

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The United States and China imposed new tit-for-tat tariffs against each other's goods in late September, the latest escalation in a heated trade war between them.

The news comes after the Trump administration imposed tariffs of $200 billion on Chinese imports in September, and Beijing retaliated with tariffs on $60 billion of US imports to China.

Chinese exports to the United States have at least temporarily defied forecasts they would weaken after being hit by punitive tariffs of up to 25 percent in a fight over American complaints about Beijing's technology policy.

Beijing's export data has been surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer USA duties went into effect, raising concerns about a sharper drop in export strength once all tariffs kick in.

For January-September, China's trade surplus with the United States was $225.79 billion, compared with about $196.01 billion in the same period previous year.

Asked about a Trump-Xi meeting at the G20 summit, Chinese Foreign Ministry spokesman Lu Kang told a regular news briefing in Beijing on Friday that, "China and the United States maintain communication at all levels of dialogue and exchanges".

While the data showed China's trade remained strong for the month, analysts forecast the trade war will begin to hurt in the coming months.

The volume of exports from China to Russian Federation has grown by nearly 13 percent, exceeding $35 billion.

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"We will watch for downside risks to China's exports" in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

"The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan)", said Julian Evans-Pritchard, China economist at Capital Economics.

"Exports continued to defy U.S. tariffs last month but imports struggled in the face of cooling domestic demand", said Julian Evans-Pritchard of Capital Economics in a report.

"The front-loading impact is quite obvious to me", said Betty Wang, senior China economist at ANZ in Hong Kong. "And I have a lot more to do if I want to do it and I don't want to do but they have to come to the table".

Chinese exports to the U.S. have at least temporarily defied forecasts they would weaken after being hit by punitive tariffs of up to 25 percent in a fight over American complaints about Beijing's technology policy.

China has denied it is interfering.

The growing trade war prompted the International Monetary Fund on Tuesday to cut its global economic growth forecasts for 2018 and 2019.

The IMF also lowered estimates for the United States and the global economy as a whole.