| Joe Mcdonald |
BEIJING (AP) – China’s exports to the United States (US) plunged in January and February as President Donald Trump’s punitive tariffs chilled demand, while sales to the rest of the world also weakened.
Exports to the US China’s biggest trading partner, fell 14.1 per cent from a year earlier to USD52.3 billion in the first two months of 2019, customs data showed yesterday. Analysts usually look at the first two months of the year together to screen out the effect of the Lunar New Year holiday, when factories close for up to two weeks.
China’s global exports sank 4.6 per cent to USD353.2 billion for the two-month period.
The trade slump has added to pressure on Chinese leaders to make peace with Washington in their tariff fight over Beijing’s technology ambitions. Premier Li Keqiang, the top economic official, warned this week China faces a “graver and more complicated environment”.
The decline in exports to the US market represented a worsening of last December’s 3.5 per cent contraction.
Sales to the US had kept growing by double digits through most of 2018 despite Trump’s tariff hikes starting in July as exporters rushed to fill orders. But they started to slide in last December once the full impact of the penalties hit.
This is the weakest start to the year for Chinese trade since 2016, according to Capital Economics.
Washington and Beijing say negotiations are making progress after Trump postponed another planned tariff hike on March 1. But forecasters say even if they reach an agreement, this year’s Chinese exports will be lackluster.
“Slow global demand will weigh on China’s export growth in 2019,” said Louis Kuijs of Oxford Economics in a report.
A truce with Trump would help exports, but “tensions on technology and China’s industrial policy are unlikely to subside any time soon,” Kuijs said. “The survival of the agreement will remain dependent on political judgments in Washington.”
Chinese imports of American goods in January and February plummeted 35.1 per cent to USD17.2 billion, depressed by Beijing’s retaliatory tariffs and encouragement to importers to buy more from non-US suppliers.
In the same period, exports to the 28-nation European Union rose 2.4 per cent from a year earlier to USD64.7 billion. China’s trade surplus with Europe was USD21.9 billion.
Total Chinese imports in January and February were off 3.1 per cent from a year earlier at USD309.5 billion, reflecting slowing domestic economic activity.
The country’s global trade surplus was USD43.7 billion. The politically sensitive surplus with the US for the two-month period was USD42 billion.