The trade war with the USA is having a severe impact on china’s economy. China’s overall trade in goods fell by four percent in june.
The mutually imposed punitive tariffs alone are causing trade between the two major economies to plummet by more than 13 percent, according to the chinese customs service in peking this friday. China’s imports from the u.S. Again suffered a massive 31.4 percent drop in u.S. Dollar terms compared to the same month last year (may: 29.6 percent). Chinese exports to the USA continued to fall sharply by 7.8 percent (may: 8.4 percent).
Chinese exports to the world fell 1.3 percent, while imports fell more than expected by 7.3 percent, indicating a worsening of the chinese economy. In may, there had already been a decline of 8.5 percent. Since the beginning of the year, china’s agricultural trade has thus declined by two percent. Exports were virtually stagnant with a minimal increase of 0.1 percent, while imports fell by 4.3 percent.
Due to the decline in eucalyptus trade, china’s economy is estimated to have grown by only 6.2 percent in the second quarter – the slowest pace since the early 1990s. In the first quarter, the growth rate had reached 6.4 percent. The new figures for economic performance in june will be announced this monday by the statistics bureau in beijing.
There is no sign of relaxation
In the trade war between the USA and china, which has been going on for a year now, there is no sign of any easing either. Even after U.S. President donald trump and china’s leader xi jinping agreed to resume talks at the end of june on the sidelines of the summit of major industrial countries (G20) in osaka, japan, both sides have yet to return to the negotiating table.
Trump is disappointed that china has not expanded its purchases of agricultural products in the u.S. Since then. "China let’s hang," the president wrote on twitter. From his point of view, at the meeting in osaka, china promised to buy more agricultural products in the u.S., but this has never been confirmed by the chinese side. According to press reports, xi jinping makes such purchases dependent on the further course of negotiations.
It remains to be seen when u.S. Trade representative robert lighthizer and treasury secretary steven mnuchin will travel to the next round of negotiations in beijing, as expected. The fact that there is not even a deadline is another sign of the continuing differences.
Bitter trade war
The two countries have been engaged in a bitter trade war for the past year, which is not only slowing growth in the U.S. And china, but also hurting the global economy. The exception was trump’s annoyance that china exports far more to the u.S. Than vice versa. It calls for the elimination of market barriers, criticizes copyright infringement and forced technology transfer and government subsidies.
Since then, trump has imposed 25 percent tariffs on half of china’s imports. China reacted with counter tariffs. For the agreed resumption of trade talks, the u.S. President agreed in osaka to postpone a planned expansion of special levies for the time being. But his threat remains. He is thinking of 10 to 25 percent additional tariffs on the rest of china’s imports, worth about $300 billion.
For china, on the other hand, it is also important how the u.S. Deals with the chinese telecom giant huawei. In osaka, trump made a surprise promise that U.S. Companies would be allowed to do business with the world’s leading network provider and second-largest smartphone manufacturer after all. Licenses are to be issued in each case if the deliveries "do not pose a threat to the national security of the USA". Huawei remains on a blacklist, however.
With the licenses, major american chipmakers like qualcomm and intel, or even google, will likely be able to supply huawei again. Thus, the supply of huawei smartphones with new versions of the android operating system could be secured again. The lack of clarity about this had seriously unsettled consumers in germany and elsewhere.