China’s trade surplus with the United States widened to a record in August even as the country’s export growth slowed slightly, an outcome that could push President Donald Trump to turn up the heat on Beijing in their cantankerous trade dispute.
The politically sensitive surplus hit $31.05 billion in August, up from $28.09 billion in July and surpassing the previous record set in June.
Over the first eight months of the year, China’s surplus with its largest export market has risen nearly 15 percent, adding to tensions in the trade relationship between the world’s two largest economies.
China’s annual export growth in August moderated slightly to 9.8 percent, customs data showed on Saturday, the weakest rate since March but only slightly below recent trends.
The number missed analysts’ forecasts that shipments from the world’s largest exporter would rise 10.1 percent, slowing only slightly from 12.2 percent in July.
The world’s largest trading nation got off to a strong start this year, but its economic outlook is being clouded by the rapidly escalating U.S. trade dispute and cooling domestic demand.
Investors fear Washington could impose duties on another $200 billion of Chinese imports at any time, in what would be its most sweeping measures yet, and Beijing has vowed to once again retaliate.
Trump upped the ante again on Friday as he warned he was ready to slap tariffs on nearly all Chinese imports to the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.
Washington has long criticised China’s huge trade surplus with the United States and has demanded Beijing reduce it. Still, disagreements between the two major economic powers run deeper than just the trade balance and tensions remain over limits on U.S. firms’ access to Chinese markets, intellectual property protection, technology transfers and investment.
Imports, a key gauge of the strength of domestic demand, grew 20 percent, beating forecasts. Analysts had expected growth of 18.7 percent, slowing from July’s surprisingly high 27.3 percent.
That resulted in China posting a smaller overall trade surplus of $27.91 billion for the month. Analysts had expected the surplus would rise to $31.79 billion from $28.05 billion in July.
The surplus with the United States was larger than China’s net surplus for the month, indicating China would be running a deficit if trade with the world’s largest economy was excluded.