China's trade surplus with USA swells in June

China is hitting the US where it hurts soybeans

China is hitting the US where it hurts soybeans

China's Commerce Ministry said that Beijing had no choice but to fight back after the U.S. "launched the largest trade war in economic history", accusing Washington of violating the rules of the World Trade Organization (WTO).

June exports to the United States grew faster than China's total with the world, expanding by 13.6 per cent over a year ago in possible sign exporters were rushing to fill orders.

Last week, the United States and China introduced tariffs of 25 percent on $34 billion of each other's exports. China also said both its imports and exports with the United States rose in the first half of 2018.

Analysts expect to see the impact of the tariffs in July's figures.

For January-June, it rose to $133.76 billion, compared with about $117.51 billion in the same period a year ago. Washington has warned it may ultimately impose tariffs on more than $500 billion worth of Chinese goods - almost the total amount of US imports from China previous year.

After a strong start to the year, growth in China's exports has moderated recently, and is expected to face more pressure from the initial round of U.S. tariffs.

Trump imposed $34 billion of tariffs on China, and another round of $16 billion is around the corner.

The trade balance between the two countries, which is at the centre of the trade dispute, continued to move in favour of China. The new tariffs would kick in within 60 days.

But in a statement coming from the Chinese Commerce Ministry, The Asian nation said the surplus was overestimated and caused by America's own "domestic structural problems".

"Targeting such a large amount of basic consumers will inevitably have an effect on USA inflation".

The trade surplus was 261.88 billion yuan last month, official data showed.

David Kuo, chief executive of the Motley Fool Singapore, said "US tariffs will increase the cost of Chinese imports but they are unlikely to deter U.S. consumers entirely".

"Looking ahead, export growth will cool in the coming months as United States tariffs start to bite alongside a broader softening in global demand", Julian Evans-Pritchard, Senior China Economist at Capital Economics in Singapore wrote in a note, though he noted a weaker yuan should help offset some of the decline.

"So we would be back to square one", Mr Kuo said, with China exporting more to the USA than it buys from the country. The sign added: "The US provoked a trade war, we vow to accompany it to the end!"

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