China’s exports grew faster than expected, while imports surged, showing both domestic and international demand continue to shrug off the uncertainty of the trade conflict with the US.
Exports rose 12.2 percent in July in dollar terms from a year earlier, the customs administration said, faster than the forecast 10 percent. Imports climbed 27.3 percent, leaving a trade surplus of $28 billion.
As the world’s largest exporter, China is still benefiting from robust global demand, but increasing tensions and rising trade barriers with the US are weighing on the outlook. Although most of the threatened tariffs still haven’t gone into effect yet, the two remain locked in an escalating tit for tat exchange of threats, signaling worse is to come.
“The higher-than-expected imports were pushed up by energy prices, which narrowed the trade balance,” said Iris Pang, greater China economist at ING Wholesale Banking in Hong Kong.
“The impact of tariffs on exports is yet to be reflected. We will see a full-month tariff effect in August.”
The Chinese government announced its list of $60 billion worth of US goods it will hit with higher import taxes should the US follow through on a plan to impose duties on an additional $200 billion of Chinese goods.
That follows a previous round, where each side imposes tariffs on $34 billion of imports, with promises of
$16 billion more.