Trump Ponders Tariffs as China’s Exporters Hurry Up and Wait

The trade war with United States has yet to have a detrimental effect on China’s trade economy after total activity surged 14% higher in dollar terms in August. Semiconductors led the way in absolute terms with a 16% improvement while consumer goods including apparel (up by just 1%) and toys (4%) saw a lackluster development. While U.S. tariffs loom over PC components the growth rate in exports slowed to 7% from 8% in the prior three months even though the product line is one of the largest in the $200 billion being targeted for duties.

Chinese exports to the U.S. overall climbed 13% indicating that exporters broadly are looking to beat the duties – even though some of those exports won’t arrive until late September. There's a risk they may arrive after the new tariffs are applied. President Trump has reiterated his commitment to the $200 billion list and maybe more, though NEC Director Kudlow has said the coverage and rates have yet to be decided. In the meantime China’s trade surplus with America reached a record high of $31 billion, which will likely harden President Trump’s stance.