China not engaged in trade talks with U.S.: Beijing's Commerce ministry

Workers sort dried seafood for export at a factory in Lianyungang in China's eastern Jiangsu province on July 5

Workers sort dried seafood for export at a factory in Lianyungang in China's eastern Jiangsu province on July 5

For January-June, it rose to $133.76 billion, compared with about $117.51 billion in the same period previous year.

The expanding trade surplus was largely because of smaller imports. So far, encouraged by strong job growth and expectations of good quarterly earnings reports, U.S. markets have been strong and the Australian market has reached a 10-year record high.

Trump has railed against China's trade surplus with the U.S., which ran at $375 billion in 2017, and has demanded Beijing cut it. Washington has warned it may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China previous year.

Beijing said China's surplus with the USA hit an all-time high $28.97 billion last month, while exports to the country hit a record $42.62 billion.

China's trade imbalance is at the heart of US President Donald Trump's anger at what he describes as Beijing's unfair trade practices that are hurting American companies and destroying jobs.

Imports grew 14.1% in June from a year ago, well below the 26% increase in May and economists' forecast of a 23.5% gain. China is running out of American goods for retaliatory tariffs due to their lopsided trade balance.

Amy Zhuang has warned that there could be knock-on effects if the USA proceeds with its proposal for a new round of tariffs on $200bn of Chinese goods.

"Targeting such a large amount of basic consumers will inevitably have an effect on United States inflation".

The United States, Canada and Mexico have been negotiating to revamp the 24-year-old trade pact since last August, but talks have stalled over US demands on autos and other issues.

But, he said, China has another option - Beijing could reduce the impact of United States tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.

The US economy is far less reliant on trade than most other major countries, but there will be an impact from the higher costs of imports.

"So we would be back to square one", Mr Kuo said, with China exporting more to the USA than it buys from the country. "But due to domestic politics, the USA has gone back on its words, brazenly abandoned the bilateral consensus, and insisted on fighting a trade war with China".

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