Donald Trump's trade war hits Chinese exports

Amongst other things, the Trump Administration-imposed tariffs on various Chinese goods are suspected of being responsible for the drop.

The data reveals that China achieved a trade surplus of $323.3 billion, which is the largest trade surplus in more than a decade.

Despite the levies, exports to the United States grew 11.3% a year ago while imports rose 0.7%, expanding the surplus to $323.3 billion from $275.8 billion in 2017, customs data show.

Despite efforts by the Trump administration to pressure Beijing into reducing the US-China trade deficit, the trade surplus with the US still reached $323.32 billion past year - the highest level since 2006.

Traditionally China imports vast quantities of American soybeans in the second half of the year, long making it the most valuable import from the US. In a way, this seems to reflect the retaliatory efforts from Beijing over the tariffs.

Monday's announcement comes as Beijing tries to reverse a decline in economic growth while facing a potential fall-off in American orders for Chinese goods following President Donald Trump's tariff hikes in the fight over China's technology ambitions. This prompted retaliation from Beijing and resulted in an ongoing trade war that is damaging the global economy.

Representatives of both countries are now negotiating a truce, with US Trade Representative Robert Lighthizer setting March 1 as a hard deadline for the talks.

China also increased its trade surplus with the USA - a key bone of contention for Donald Trump in the trade war - by 17% to $323.3bn, the highest since 2006. If a deal is not reached by that time, Washington is set to raise tariffs on $200 billion (€176 billion) of Chinese goods from 10 to 25 percent.

Despite the trade war, exports to the U.S have continued to grow in double digits.

Chinese direct investment in U.S. assets dropped sharply in 2018 to the lowest level in seven years, due to the trade war, Chinese restrictions on outbound investment and new United States government scrutiny of Chinese acquisitions of American assets, the Rhodium Group consultancy reported on Monday.

"However, a slowdown in China's technology sector and an expansion of U.S. screening to include certain venture capital transactions present headwinds for Chinese outbound venture investment, some of which were already visible in the second half of the year", the group said.

China's trade growth may slow in 2019 due to external uncertainties and rising protectionism, Li warned.

Featured image from Shutterstock.

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