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Donald Trump's trade war hits Chinese exports

14 January 2019

China's large trade surplus with the United States has always been a sore point with Washington, and is at the centre of a bitter dispute between the world's biggest economies.

However, the data show December exports to USA contracted 3.5 percent compared with year ago as Trump tariff hikes hit.

China's politically-sensitive surplus with the US rose 17.2 per cent to $323.32-billion previous year, the highest on record going back to 2006, according to Reuters calculations based on customs data. China exports to the USA declined 3.5 per cent in December while its imports from the United States were down 35.8 per cent for the month. If a deal is not reached by that time, Washington is set to raise tariffs on $200 billion (€176 billion) of Chinese goods from 10 to 25 percent.

Trump wants Beijing to buy more American goods to narrow the yawning trade gap and allow foreign players better access and protection in the Chinese market.

Exports rose 7.1 per cent, customs data showed Monday, down from the 7.9 per cent reported earlier for 2017.

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The higher tariffs China levied on US supplies also hit the country's overall import growth. Import growth also fell sharply in the face of cooling domestic demand.

"China effectively tackled changes of the external environment a year ago, and the foreign trade maintained stable and positive growth, reaching a historic high in import and export volume", the customs spokesperson, Li Kuiwen, said on Monday.

With policy easing unlikely to put a floor beneath domestic economic activity until the second half of this year, import growth is likely to remain subdued, they added.

Exports to the United States surged 11.3 percent year-on-year in 2018 to $478.4 billion, while imports from the United States to China rose a scanty 0.7 percent over the same period.

With US tariffs in place, the gloomy export picture has reinforced the need for Beijing to rely on its legion of consumers to grow its economy. He added that cooperation with Belt and Road countries "has become new driving force of China's foreign trade development".

Donald Trump's trade war hits Chinese exports