China’s trade surplus with the United States ballooned to a record 35.6 billion dollars in November, official data showed on Saturday, as exports across the Pacific remained strong despite a raft of US tariffs while imports shrank.
Relations between the top two economies continue to be tense despite a trade war truce struck between the US President, Donald Trump and his counterpart President, Xi Jinping last week.
Mr. Trump and figures in his administration have said China would immediately start buying US goods in bulk, but Beijing has refrained from confirming those claims.
The increasingly lopsided trade in goods threatens to further derail prospects for a trade deal during a 90-day negotiation period. The ballooning trade deficit with China is a particularly sore point for Mr. Trump, who campaigned on turning around the situation.
China’s exports to the US rose 9.8% for November on-year, while imporl 25% on-year, the data from China’s customs administration showed.
American farmers have been hit particularly hard by the trade tensions. Mr. Trump tweeted this week that China would begin buying products from US farmers 'immediately'.
Usually Chinese buyers have snapped up American soybeans in the final months of the year as the harvest hits the market and beans from competitor Brazil dry up.
But this year, Chinese buyers have passed on US soybeans which face a 25% border tax upon import, part of the $50 billion in US goods Beijing hit with higher duties this summer in retaliation for US tariffs.
China’s soybean imports fell 38% year-on-year, to 5.4 million tonnes for the month, the data showed. The trade surplus with the US expanded to 293.5 billion dollars for January-November, up from 251.3 billion dollars during the same period last year.
China’s overall trade — what it buys and sells with all countries, including the US — logged a $44.7 billion surplus in November, up from $35 billion the previous month, the data showed.
But growth of exports and imports slowed from October, with exports rising 5.4 percent for November on-year, short of the 9.4% forecast by Bloomberg News, and imports rising 3.0% on-year, also below the forecast.
The sagging export and import growth is another bad sign for China’s economy, which grew at its slowest pace for nine years in the third quarter, expanding 6.5% on-year for July-September.
While exports to the US have held up so far this autumn, the row has sapped confidence.
The Shanghai composite stock index has fallen by about one-quarter from its January high, while the yuan has slipped about 9% against the dollar.
The trade tensions with Washington come at a tough time for Beijing, which is battling to tackle a mountain of debt as credit tightens and infrastructure investment falls.
Last week, as part of the trade war truce, Trump agreed to hold off on plans to raise tariffs on 200 billion dollars in Chinese imports to 25% beginning January 1, leaving them at the current 10% rate.
But unease over the agreement has dented stocks this week with major US indices falling more than 2% to close the market’s worst week since March and one that left both the Dow and the S&P 500 in negative territory for the year.
China also reacted furiously after a top executive and daughter of the founder of Chinese telecom giant Huawei was arrested in Canada this week following a US extradition request.
In addition to buying US goods immediately, Mr. Trump claimed this week that China would roll back tariffs of 40% on US made cars — but China’s commerce ministry declined to confirm this move when asked about it Thursday.
Still, Beijing remains outwardly optimistic on prospects for a trade deal.
'We are fully confident that we can reach an agreement in the coming 90 days,' commerce ministry spokesman, Mr. Gao Feng said.