Ongoing trade war likely to weigh on China’s exports from U.S. rather than imports, says ANZ Research

China-U.S. trade tariffs seem to have had more impact on China’s exports than its imports from the US. July marks the first month since China and the US started to impose additional 25 percent tariffs on each other’s products worth USD34 billion from July 6. China’s export growth to the US slowed to 11.2 percent in July from 12.5 percent in June, even with the help of a low base, according to the latest report from ANZ Research.

However, China’s imports from the US grew faster to 11.1 percent y/y in July from 9.6 percent prior. This seems to suggest that so far China’s imports from the US have been less affected by the additional tariffs than its exports to the US.

At the same time, China’s imports from ASEAN, EU and Australia jumped 30.2 percent y/y, 20.0 percent y/y and 33.7 percent y/y, which may suggest that China is trying to seek other import sources in the case of a trade war.

However, China-US trade surplus stayed little changed at USD28.1 billion in July, suggesting no imminent resolution of the trade war. The USD28 billion trade surplus changed little from the previous month and was equivalent to China’s total trade surplus in the month.

This will help little to cool down the escalating trade tensions between the two countries. The US announced on August 7 that it will go ahead with imposing additional 25 percent tariffs on the remaining USD16 billion Chinese products (part of the USD50 billion) on August 23, the report added.