China, U.S. in Trade War as Surplus Reduces

Agency Report/

Official data on Wednesday showed that China’s trade surplus with the United States declined in July after President Donald Trump imposed tariffs on Chinese goods in a showdown between the world’s two biggest economies.

The Asian giant posted a $28.1 billion surplus last month after reporting a record $28.9 billion in June according to Chinese customs data.

The dip is unlikely to ease tensions with the White House, which on July 6 imposed 25 per cent tariffs on $34 billion of Chinese products entering the US, triggering an instant tit-for-tat response from Beijing.

US officials said Tuesday they would slap 25 per cent levies on another $16 billion worth of Chinese imports from August 23.

The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hamper the global economy.

The White House has also lined up another $200 billion worth of Chinese imports to target in future.

Meanwhile, China’s foreign exchange reserves rose 5.8 billion U.S. dollars, or 0.19 per cent, from a month earlier to 3.1179 trillion dollars at the end of July, the central bank said.

The increase followed a month-on-month rise of about 1.5 billion dollars in June, according to data from the People’s Bank of China (PBOC).

According to the PBOC data, China’s gold reserves at the end of July remained unchanged at 59.24 million ounces, with a value of 72.32 billion dollars, down from about 74.07 billion dollars at the end of June.

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