China’s exports fell in August to the surprise of many experts who had predicted an increase. Shipments to the USA have been particularly hit, leading many to concern about the effects of the two nations’ trade war.
August exports fell 1% from a year earlier, the biggest fall since June when they fell by 1.3%. China’s year-on-year exports to the USA fell by 16% for the month, a dramatic decrease from the decline of 6.5% in July. Imports from the USA also declined by 22.4%.
This follows rising trade tensions between the two nations in August. Last month the US government announced 15% tariffs on a broad range of Chinese goods to be put into effect from September. This has significantly affected trade with the USA, with more tariff measures set to take effect on 1 October and 15 December. However, Chinese exports to Europe, South Korea, Australia and South East Asia also decreased on a year-on-year basis in July.
China is expected to announce support measures soon to avoid the rising risk of a significant economic slowdown, including the potential cutting of key lending rates. China has also retaliated to US tariffs with its own tariffs and by letting the value of its yuan currency fall to make its exports more attractive to foreign markets. In August, China let its currency slide past the key 7-per-dollar level for the first time since the 2008 global financial crisis, leading the US government to accusing China of manipulating its currency.
The two nations are due to renew trade talks in October, but the impact of trade wars is being laid bare. The Institute’s next ‘China Without Fear’ training course will help you plan for a successful export strategy that mitigates the risks surrounding the Chinese market, including the impact of trade wars.
The course is next being run in London on November 5th and you can sign up to it here: https://www.export.org.uk/page/ChinaWithoutFear