Will China August Exports Remain Solid Despite Trade War Escalation?
China will publish export and import data on Saturday, September 8. Economists predict, that the data will show export growth remained strong in August, despite escalation of trade tension between the US and China. Some analysts believe Chinese exporters are continuing to rush out shipments ahead of further US tariffs, buoying the headline growth readings, while some companies like steel mills are diversifying and selling more products to other countries.
According to forecasts, exports will rise 10.1% yoy in August, lower than 12.2% growth in July. China's imports likely rose 18.7% yoy in August, slowing from July's high 27.3% growth. China’s overall trade surplus is forecast to have expanded to $31.79 billion in August, from $28.05 billion the previous month.
US President Donald Trump proposed tariffs on $200 billion of Chinese goods, which could go into effect as soon as Friday when a public comment period on the taxes concludes. It's unclear whether the new tariffs will be set at 10% or 25%. The Trump administration slapped 25% tariffs on $34 billion of Chinese imports in July and another $16 billion last week.
Morgan Stanley estimates the final impact of the tariffs, after considering the policy response, will reduce China's GDP growth by 0.2%, with a 0.1% decline for US GDP growth.