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China exports top forecasts but warning over US tariffs impact

AFP  |  Beijing 

today posted a forecast-busting surge in exports for July but while its surplus with the US dipped slightly there was a warning that the full impact of US sanctions was yet to be felt.

The figures come as the world's two largest economies exchange threats of stiff duties on billions of dollars worth of goods, fuelling fears of a full-blown trade conflict that could hit global growth.

reported a USD 28.1 billion surplus with the US in July, down from the record USD 28.9 billion seen in June. But it was 11 per cent higher than in the same month last year.

China's global trade surplus also fell, from USD 41.5 billion in June to USD 28 billion in July. Exports surged a better-than-expected 12.2 per cent in July, while imports soared 27.3 per cent, also beating estimates.

But the latest readings are unlikely to ease tensions with

China's gaping trade surplus with the has long been a bone of contention, with the accusing the country of unfair practices, stealing American jobs and thieving its technological know-how.

While July's numbers narrow the gap, the relatively small change will do "little to cool down the escalating trade tensions between the two countries", said Betty Wang, senior at

The on July 6 imposed 25 per cent tariffs on USD 34 billion of Chinese products entering the US, triggering a tit-for-tat response from Analysts were split on how much effect the tariffs had on July's reading.

"The impact of tariffs on exports is yet to be reflected. We will see a full-month tariff effect in August," Iris Pang, greater at in Hong Kong, told

But of Capital Economists said: "Shipments to the US did weaken slightly, which hints at some impact from the tariffs. Equally though, this may reflect a broader softening in economic momentum among developed economies given that exports to the EU edged down too."

Trump has boasted that trade wars are "easy to win" and warned he would hit virtually all Chinese imports if does not back down and take steps to reduce its USD 335 billion surplus with the US.

Yesterday, US officials said they would slap 25 per cent levies on another USD 16 billion worth of Chinese imports from August 23.

In a statement, the office of US Trade said its "exhaustive" investigation showed "China's acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden US commerce".

US officials said there were 279 new goods to be targeted in the latest round of tariffs, including motorcycles, tractors, railroad parts, electronic circuits, motors and

The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hammer the global economy.

has also lined up an additional USD 200 billion in Chinese imports and last week Trump said he could raise tariffs on those products to 25 per cent instead of the previously touted 10 per cent.

Beijing has called on US officials to be "cool headed", but has warned it will retaliate to any tariffs with its own measures.

However, the US imports far more from China than the other way around, meaning Beijing may at some point need to look for other means of retaliation.

The US-China trade war will cut the global by 0.7 per cent by 2020, said in a note yesterday.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, August 08 2018. 15:05 IST