Trump's China Trade War Just Escalated by $16 Billion

Cars to be exported are seen at a port in Lianyungang Jiangsu province China

Cars to be exported are seen at a port in Lianyungang Jiangsu province China

Representatives for the White House, the U.S. Trade Representative and the U.S. Department of Commerce did not immediately reply to requests for comment.

In July, China's exports rose by 6 percent to 1.39 trillion yuan, a reading that beat market expectations, Huatai Securities said in a research note.

But there seems no solution at sight as the Trump administration prepares for tariffs of up to 25 per cent on an additional United States dollars 200 billion in Chinese products.

China's prohibitive import tariff, which amounts to close to $18 a barrel when crude is at $70, should also deter other Chinese buyers such as state-owned companies Petro China, as well as state-controlled Zhenhua Oil and independent refiners, from importing US crude.

"Currency devaluation, which may have helped exports to some extent, has been largely market-driven in our view and is not a preferred policy tool by Chinese policy makers as part of the retaliation measures", Wang said.

Analysts still expect a less favorable overall trade balance for China in coming months given it's early days in the tariff brawl.

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Chinese data on Wednesday showed exports to the U.S. rose 13.3% in July to $41.5 billion against a year ago.

Trade with countries along the Belt and Road totaled 4.57 trillion yuan, up 11.3 percent year on year, 2.7 percentage points faster than the average growth rate, data showed. "Additional trade war bickering could destroy the business models for many vehicles".

China's exports soared in July, showing little impact from United States tariffs, as Washington finalises more duties on Chinese imports. It would likely have to impose penalties on USA companies doing business in China to make up the difference.

"Although this may for a moment bring preening with delight, it will make it hard to resolve economic imbalances or out of kilter politics and other deep-rooted problems", it said.

The US will impose a 25% tariff on $16 billion worth of Chinese goods starting August 23.

May 29: The White House announces the tariffs on $50 billion of Chinese goodswill move forward, with the final list of goods released June 15. The Trump administration already has a list of $200 billion more in tariffs against China that are under consideration.

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