Despite continuous U.S tariff hikes, China’s trade surplus with the United States hit record high of $31 billion in August, up from $28 billion in July. Exports to the U.S rose to $44.4 billion, increasing from 13.3 to 13.4 percent from July to August.
The ongoing trade war between the two biggest economies in the world doesn’t seem to weaken China’s large surplus with the US.
Beijing and Washington have slapped each other with tariffs in recent months to the point of Trump administration threatening to impose tariffs on $200 billion worth of Chinese imports.
In response, Beijing threatened with retaliation which will target US companies operating in the country.
In the past eight months, China’s trade surplus with its biggest export market has increased by nearly 15 percent.
The U.S will certainly not be happy with this and tensions are seen to further escalate because Washington has repeatedly demanded China to narrow down its trade gap.
On Friday, Trump fired another warning:
“The $200 billion we are talking about could take place very soon depending on what happens with them. To a certain extent it’s going to be up to China. And I hate to say this, but behind that is another $267 billion ready to go on short notice if I want. That totally changes the equation.”
Investors are wary about the effect of this ongoing dispute between China and US on the global economy and trade. This latest move from Trump’s camp will bring this trade war to a fever pitch.
Economists argue that these tariffs will lead to economic slowdown.
Michael Zezas, Morgan Stanley’s chief US public policy strategist shared his opinion: