China's trade surplus with the US held steady in July

(Kevin Frayer / Getty Images)
  • China’s overall trade surplus missed expectations, but its surplus with the US held steady.
  • The first round of US tariffs against China went into effect on July 6.
  • Analysts said China’s ongoing surplus with the US was helped by recent weakness in the Chinese yuan.

China’s international trade surplus fell in July, according to data from the Chinese National Bureau of Statistics.

The NBS said the monthly surplus came in at $US28.05 billion, missing estimates of a $US39.05 billion surplus and down from $US41.61 billion in the previous month.

However, China’s surplus with the US was little-changed $28.09 billion, down slightly from $US28.93 billion in June.

The US implemented a 25% import tariffs on $US34 billion worth of Chinese goods on July 6.

According to Reuters, analysts said the negative effects from the first round of US tariffs would have been partially negated by the recent bout of weakness in the Chinese yuan.

Capital Economics said that a weaker currency would continue to support China’s trade balance with the US in the months ahead, although overall exports may decline due to a pending slowdown in global growth.

Trade tensions between the two countries remain high, with the US rolling out tariffs on another $US16 billion worth of Chinese goods this week.

In addition, US President Trump has threatened to raise the tariff rate to 25%, up from the current 10%, on a further $US200 billion worth of Chinese products.

China is threatening to retaliate with tariffs of its own on $US60 billion of US exports.

China’s trade surplus with the US was higher than its overall surplus in the month of July, which suggests it ran a net trade deficit with its other major trading partners.

Total exports rose by 12.2%, offset against a 27.2% rise in imports.

Over the first seven months of 2018, China’s total surplus with the US was $161.63 billion, up from $US142.75 billion over the same period last year.

Chinese share markets remain volatile, with both major exchanges in Shenzhen and Shanghai down by more than 1% in afternoon trade.

Today’s price action follows a sharp selloff on Monday, which was reversed yesterday when Chinese stocks posted their biggest one-day gain in two years.

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