Finance
China’s is boosting exports to US before new trade war tariffs
-
China has been front-loading exports to the US ahead of
a looming rise in tariffs in January. -
Chinese stocks tumbled today on trade war fears and
worries about a slowing Chinese economy. -
Experts are pessimistic about the outcome of a Trump-Xi
meeting at the G20 summit later this month.
Chinese exports to the US have
risen this year as the country looks to get as many goods as
possible off its shores before steeper tariffs come in
January.
“This growth is due to exporters’
concern that the 10% tariffs on $200 billion of exported goods to
the US will rise to 25% on 1 January 2019, which has led them to
front-load exports,”
ING said in a report on Friday.
Exports grew 15.6% year-on-year,
up from an original consensus of 11.7% growth. Once those tariff
hikes kick in, these figures are likely to weaken, ING
said.
Experts are pessimistic that the
trade war will abate at this month’s G20 summit. US President
Trump and Chinese President Xi Jinping will
meet at this year’s meeting at the end of November in Argentina.
But hopes of a new trade deal between the countries have dampened
on the back of negative rhetoric. This is despite booming demand
from the US.
See the chart below:
Imports into China are also up as
the country boosts infrastructure spending as part of a fiscal
stimulus designed to stave off the potential economic pain of
Trump’s trade war.
Imports grew 21.4% on the back of
doubts about future export possibilities. ING says that China
will not strengthen the yuan, which would make imports cheaper,
to avoid being labeled a currency manipulator by the US. The
Chinese currency has slumped 10% against the dollar since
February, boosting export competitiveness.
The looming rise in import
tariffs “encourages exporters to rush through orders to the
United States,” Louis Kuijs, head of Asia economics at research
firm Oxford Economics, said in a client note on November
8.
ING expects Chinese imports to
grow more than exports in 2019 as the country brings in building
materials and consumables, having cut taxes on the latter. US
demand even though President Trump has previously mentioned that
he’s prepared to increase tariffs coverage to all of Chinese
exports to the United States, which topped $500 billion last
year.
China’s stocks have been hammered
this year. The benchmark Shanghai Composite Index and Hong Kong’s
Hang Seng Index both closed down more than 1.4% on Friday, hurt
by trade war fears, among a slowing Chinese economy and other
concerns.
-
Entertainment6 days ago
What’s on the far side of the moon? Not darkness.
-
Business7 days ago
How Rubrik’s IPO paid off big for Greylock VC Asheem Chandna
-
Business6 days ago
TikTok faces a ban in the US, Tesla profits drop and healthcare data leaks
-
Business5 days ago
London’s first defense tech hackathon brings Ukraine war closer to the city’s startups
-
Business7 days ago
Photo-sharing community EyeEm will license users’ photos to train AI if they don’t delete them
-
Entertainment6 days ago
How to watch ‘The Idea of You’: Release date, streaming deals
-
Entertainment5 days ago
Mark Zuckerberg has found a new sense of style. Why?
-
Business5 days ago
Humanoid robots are learning to fall well