China trade surplus with U.S. hits historic high & timing couldn’t be worse

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China's total exports rose 11.3% year-on-year in June, beating a Bloomberg News forecast of 9.5%.

Over the first six months of the year the surplus climbed to $133.8 billion as total two-way trade continued to expand despite the face-off.

The US trade deficit with China hit a record high in June, according to a Reuters analysis, despite President TrumpDonald John TrumpGiuliani: Trump interview with Mueller "further away" ACLU calls for Trump officials to hand over info on immigrant children Kushner to join Pompeo for meetings with Mexican leaders MORE's efforts to alter the trade relationship between the world's two largest economies. "They are just a trade bully", he told reporters in Geneva.

Trump, who has demanded Beijing cut the trade surplus, could use the latest result to further ratchet up pressure on China after both sides last week imposed tit-for-tat tariffs on $34 billion of each other's goods. That leaves about $80 billion for penalty tariffs after Beijing's previous increases either imposed or threatened on a total of $50 billion of USA goods are counted.

For January-June, it rose to $133.76 billion, compared with about $117.51 billion in the same period past year.

Earlier this week Donald Trump proposed a 10% tariff on $200bn of Chinese goods entering the USA, saying that tariffs already in place on steel and aluminium imports and $34bn of goods had failed to force significant reforms by Beijing. They said as a effect figures for July and August were likely to show a decline in exports to the US.

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"Targeting such a large amount of basic consumers will inevitably have an effect on U.S. inflation". The politically volatile trade surplus with the United States widened by 14.2 per cent to $29 billion.

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".

This prompted Beijing to accuse Washington of launching the "largest trade war" in economic history, while immediately matching the USA tariffs dollar for dollar.

However, a lower yuan would make it more expensive for China to import United States goods.

The news came as the two economic superpowers stand on the brink of an all-out trade war that would have a huge negative impact globally.

In a sign Beijing is seeking alternative supplies of the commodities as it hit U.S. imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries.