China’s trade with U.S. shrinks as tariff war worsens

China Must Stimulate as its Economy Sharply Weakens

China's exports fell by 1% year-on-year in August, official data showed Sunday, amid a bruising trade war with the United States that has roiled markets in the world's top two economies.

Aside from that, followed by Sunday's (September 8th) China data which unleashed further upheaval on China's economy which had been scuffling to grapple with a basket of baleful turn of events on its trade dispute with United States, several analysts were pointing towards further weakness in the second-largest economy of the world, while some of them had underscored a more pressing requirement of monetary stimulus to smoothen up the nation's domestic financing amid growing obstacles in the wake of an escalated Sino-US trade dispute.

The drop comes after a surprise 3.3% rebound in July despite the yearlong battle with Washington and weakening global demand.

Exports decreased 1% in dollar terms from a year earlier, while imports declined 5.6%, leaving a trade surplus of $34.84 billion, the customs administration said Sunday.

China's August exports to the USA fell 16% year-on-year, slowing sharply from a decline of 6.5% in July. Beijing says Trump's punitive tariffs must be lifted once an agreement takes effect.

China's trade surplus with the USA shrunk to $31.3 billion in August, down $27 billion from a year prior. USA and Chinese negotiators are preparing for talks in October. Washington says some must stay to ensure Beijing carries out any promises it makes.

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China and the United States on Thursday agreed to hold high-level talks in early October in Washington, the first in-person discussions since a failed U.S.

China's trade with the U.S. shrank last month as the world's two largest trading countries remain locked in a tariff war that threatens to be a drag on the world's economy. That would extend penalties to nearly everything the United States buys from China.

China has imposed or announced penalties on an estimated $120 billion of US imports.

Beijing also has retaliated by canceling purchases of soybeans, the biggest single US export to China.

Beijing responded by imposing duties of 10 percent and 5 percent on a range of American imports. More increases are due on December 15 in line with the USA penalties. Some have been hit with increases a couple of times, while about $50 billion of US goods is unaffected, possibly to avoid disrupting Chinese industries. China's trade surplus and its technology development strategy will be discussed in the meeting.

"We continue to expect no trade deal in 2019 and even 2020 in our base case, and see the risk of further trade war escalation", she said.

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