Trade between U.S. and China plummets ahead of October negotiations
Trade between China and the United States has continued to fall ahead of October negotiations and a further tit-for-tat escalation of tariffs, according to customs data reported by AP.
The big picture: Imports of American products to China dropped to $10.3 billion in August, down 22% from the same month last year. Chinese exports to the U.S. also plummeted to $44.4 billion in August, down 16%. China's trade surplus with the U.S. shrunk to $31.3 billion in August, down $27 billion from a year prior.
- Both sides of the escalating trade war hiked tariffs on billions of dollars worth of goods last month, disrupting industries ranging from agriculture to the auto sector to consumer products.
- Talks between President Trump and Chinese President Xi Jinping earlier this summer ended without a deal. Negotiators are set to meet again in October, with Trump planning additional tariff increases on Oct. 1 and Dec. 15.
The state of play:
- On Sept. 1, the U.S. imposed a 15% tariff on $112 billion worth of Chinese goods. China retaliated by resuming 25% tariffs on American cars and adding 5–10% tariffs on $75 billion worth of goods.
- On Oct. 1, Trump will increase existing tariffs on $250 billion worth of Chinese goods from 25% to 30%.
- On Dec. 15, the U.S. will hit another batch of $160 billion of Chinese imports with 15% tariffs, originally delayed to reduce the impact on Christmas shoppers. China will retaliate with its second batch of tariffs on $75 billion of American goods.
Between the lines: Per AP, "Some analysts suggest Beijing is holding out in hopes Trump will feel pressure to make a more favorable deal as his campaign for the 2020 presidential election picks up. Trump has warned that if he is reelected, China will face a tougher U.S. negotiating stance."