The nation’s trade gap with the US widened to $31.1 billion during the month, according to Bloomberg calculations. The increase came despite exports climbing at the slowest pace since March. Shipments rose 9.8 per cent in dollar terms, the customs administration said Saturday. Imports climbed 20 per cent.
Chinese exporters are feeling the pain as trade tensions between the world’s two biggest economies get worse. Trump turned up the heat again on Friday, threatening to impose tariffs on an extra $267 billion in Chinese goods. That would be on top of duties on $50 billion already in force and another $200 billion in the works.
"Exports to the US grew at a faster pace than the previous month as exporters front-loaded orders before the additional tariffs on $200 billion Chinese goods take effect," said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. Faster US economic growth also pushed up demand, Gai said.
Trade talks last month between mid-level US and Chinese officials led nowhere. China’s commerce ministry said the two sides have maintained contact on a working level since then.
"We believe the US government will continue to escalate the scale and scope of trade and investment measures against China," Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group Ltd. in Hong Kong, wrote in a recent note. "This policy direction is unlikely to change even after the US mid-term elections in November. Besides retaliation, China is expected to offset the negative economic effects of the trade measures through a more proactive fiscal policy."
While the yuan stabilized in August, rapid weakening in previous months would have supported exports. Last month shipments grew a faster-than-expected 7.9 per cent in yuan terms.
Trump said late last month that China was devaluing the currency in an attempt to make up for lack of demand. A cheaper yuan would make China’s exports less expensive, increasing their competitiveness in the international market.