China trade surplus with USA widens to record $34.1 billion

Trump Chinese lived too well for too long

Reuters Liau Chung-ren

"We expect the dynamic to change once we get a bit deeper into this, but for now China is trying to outrun the next round of tariffs".

That surplus widened to a record $34.1 billion in September as exports to the American market rose 13 percent from a year earlier to $46.7 billion, down slightly from August's 13.4 percent growth.

September marked the second straight record Chinese monthly trade surplus with the United States.

Customs data on Friday showed growth in Chinese imports of USA goods decelerated to 9 percent over a year earlier.

The on-going trade spat between the two world powers has taken its toll on the global economy.

Imports of American goods increased 9 percent to $12.6bn, down from 11.1 percent.

He also blamed previous US presidents for allowing China to pursue unfair trade practices and said he had to tell Beijing, "It's over". -China trade frictions "have been escalating and other unstable factors still exist caused by a number of economic uncertainties worldwide", he said.

China's export data has been surprisingly resilient to tariffs, possibly as companies ramped up shipments before stiffer US duties go into effect, but factory surveys have shown export orders have been shrinking for several months.

When Mr Trump then extended those tariffs to a further $200 billion of goods in September, Beijing promptly hit back with tariffs on a further $60 billion of U.S. goods.

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. That prompted Mr Trump to threaten to extend the tariffs to nearly all China's $500 billion of exports.

"The way the USA has structured the tariffs encourages frontloading because firms that know they're going to hit with tariffs would rather pay 10 percent than 25 percent", he said.

The Chinese yuan has lost almost 10 percent of its value against the USA dollar this year.

Chinese refiners are buying more and more very cheap heavy Canadian crude oil to make up for the dwindling supply of Venezuela's heavy grades as China's road construction sector-a key consumer of the heavy oil's bitumen yield-is booming.

"He won't be happy with these figures but it proves that tariffs don't help curb exports", he said.

But he and Xi Jinping will have a chance to work things out when they meet likely next month on the sidelines of the G20 summit. These would be the first direct talks since August, but with both sides digging in their heels, there are few hopes the leaders can secure a major breakthrough.

"Bullying might be effective for small economic entities, but it will not be effective against a big economic power", Yu wrote in a column published Friday in the state-run China Daily.

"China's trade surplus will keep rising because the domestic economy is cooling down", said Andy Xie, a Shanghai-based independent economist.

President Trump added he could do a lot more if he wanted to, but said he would prefer Beijing come to the negotiating table.

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