China's June Trade Data Slightly Influenced By US Tariffs
Today’s China’s trade data for June showed imports starting to feel the effect of the US tariffs, while exports managed a small increase. Last week, US tariffs went up in the US for $34 billion. China reacted with 25% duties for the same amount for American goods.
Earlier this week, President Donald Trump's administration published a list of Chinese goods worth $200 billion and threatened to impose an additional 10% tariffs on Chinese imports. China, in turn, threatened with retaliatory measures and promised that it would file a complaint with the World Trade Organization.
According to data from China's customs office, China’s import increased by 14.1% in dollar terms in June, which is much lower than economists' forecast +20.8% and the previous value +26.0%. Meanwhile, China's exports slightly exceeded expectations (10.0%), rising 11.3% in June after rising by 12.6% in May.
In USD term, China trade surplus widened to USD 41.6B in June, up from May’s USD 24.9B and beat expectation of USD 27.2B. In CNY term, trade surplus widened to CNY 261.9B, up from May’s CNY 156.5B and beat expectation of CNY 187.0B.
In his statement, Fed Chair Jerome Powell noted a strength of the US economy with unemployment at 4%. As for wages, Powell said, that annual wage growth has moved up from “low twos” five years ago, to close to three” now. And there’s been “very gradual move up”. He noted that wages should “reflect inflation plus productivity”.