A report by the Chinese department of ministry and commerce and the Chinese Academy of International Trade and Economic Cooperation shows the first three quarters in 2018 as having steady growth. As well, international demand for Chinese made goods were relatively stable, while domestic imports were growing at a steady pace.
“The impacts of the current China-US trade friction on China’s foreign trade are limited,” read the department’s press release.
Data from the American Journal of Transportation shows China exported $504 billion to U.S. in 2017, while the U.S. exported $130 billion to the Chinese. Comparably, China exported $375 billion to the EU that same year, while the EU exported $198 billion back. The EU exported $357 billion to U.S. last year, while the U.S. exported $250 billion.
The China South Morning Post is reporting Chinese exports to the U.S. rose 13.3% in the first 10 months this year, compared with last year. Imports from the U.S. increased by 8.5% in the same period, according to China customs data. In October alone, Chinese exports to the U.S. rose by 13.2% while its imports from the U.S. fell 1.8%, earning Beijing a trade surplus of US$32 billion last month.
The top exports from the U.S. to China are grains, seeds, and straw ($14.9 billion); aircraft and spacecraft and their parts ($14.6 billion); electrical machinery and recording equipment ($12.4 billion); nuclear reactors, boilers, and machinery ($11.4 billion); and vehicles ($11 billion).
Top exports from China to the U.S. are electrical machinery and recording equipment ($131.7 billion); nuclear reactors, boilers, and machinery ($100 billion); furniture, bedding, mattresses, lighting ($31.6 billion); toys, games and sport equipment ($24.9 billion); and plastics ($15.6 billion).
The Post states that according to Beijing’s commerce ministry, that there is a strong demand for imported products in the U.S. because of the low unemployment rate, economic growth, and consumer confidence, despite tariffs imposed by the American government against China.
To date, the U.S. has imposed 10% tariffs on $200 billion worth of goods and plans on increasing the tariffs to 25% in the New Year should Beijing not meet demands to balance trade.
In response, China has imposed its own set of tariffs on $50 billion worth of American goods.
Chinese President Xi Jinping is set to meet U.S. President Donald Trump at the G20 summit in Argentina later this month with the hope of easing trade tensions.
At China’s first imports expo in Shanghai, The Post is reporting Xi announced his government would buy more goods and services from abroad totaling $30 trillion over the next 15 years. Xi also announced China will buy $10 trillion worth of foreign service as well.
Some analysts believe the trade war with the U.S. will eventually have a toll on the Chinese economy by slowing it down. In response, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending, and extending additional financing options to help struggling smaller companies, according to The Post.
Not only will tariffs eventually slow down China’s economy, it will have the same effect on the American economy as well.
“Generally speaking, many economists have agreed that adding tariffs (import and export taxes) will deter international trade and won’t be super beneficial for the U.S. economy,” stated an op-ed article in the AJOT.
“Whilst it may ‘protect’ some American jobs and industries that are being undercut by foreign competition, it will hamper the many more companies and industries who rely on international trade and globalization to survive.”
What this means for the shipping and transport industries is a decline in volume, demand, and profits.
“We’ve already started to see the damage. Bloomberg reported back in July that shipping company A.P. Moeller-Maersk A/S had already lost almost a third of its market value, and may struggle to make a profit this year as a result of rising uncertainties surrounding the Trade Wars,” stated AJOT.
The AJOT recommends governments diversify their trade routes to diversify distribution channels outside of China.