As trade war escalates, China's trade surplus with US dips marginally

As the US hit China with new tariffs, President Xi's regime in its economic report said exports in July had surged even as its trade surplus with the US dipped slightly.

The US Trade Representative's office had said today that the United States will be collecting 25 per cent tariffs on another $16 billion in Chinese goods on August 23 with focus on semiconductors.

Amid the escalating trade war, China reported $28.1 billion surplus with the US in July, down from record $28.9 billion in June. Exports surged 12.2 per cent in July as imports grew 27.3 per cent.

Economists had forecast the surplus would be $39.33 billion in July, compared to a surplus of $41.47 billion in June.

For January-July, the surplus with the U.S. rose to $161.63 billion, compared with about $142.75 billion in the same period last year.

With President Trump intent on cutting trade surplus with China, analysts have warned the full impact of trade sanctions is yet to be felt by the Communist regime. Last month, the US imposed 25 per cent tariffs on $34 billion of Chinese products entering the country.

"The impact of tariffs on exports is yet to be reflected. We will see a full-month tariff effect in August," Iris Pang, greater China economist at ING Wholesale Banking in Hong Kong, told Bloomberg News, AFP reported.

In its latest tariff attack, the US imposed 25 per cent tariffs on Chinese electronics, plastics, chemicals and railway equipment. 

However, the US Semiconductor Industry Association opposed the move to put the sector on the tariff list.

President Trump had earlier threatened 25 per cent tariffs on $200 billion worth of Chinese goods and another on $300 billion worth of goods ratcheting up pressure on China.