BEIJING – China’s trade surplus with the United States narrowed last year as the world’s two biggest economies exchanged punitive tariffs in a bruising trade war, data showed Tuesday, just as the two prepare to sign a deal dialing down tensions.
The huge difference in trade traffic is a key bone of contention for U.S. President Donald Trump in the long-running stand-off that has seen him impose tariffs on goods worth hundreds of billions of dollars, triggering retaliation from Beijing and jolting the global economy.
China’s surplus came in at around $295.8 billion in 2019, down 8.5 percent from the previous year’s record $323.3 billion, according to customs data.
Meanwhile, China’s total trade with the United States dropped 10.7 percent in yuan terms from a year earlier in 2019 to 3.7 trillion yuan ($537 billion), its government said, as the prolonged trade war strained relations.
“The risks at home and abroad are clearly increasing,” a spokesman for the Chinese General Administration of Customs acknowledged at a news conference.
In December, China’s surplus with the U.S. was around $23.2 billion, down from $24.6 billion the month before.
The mini-trade deal announced last month will see Beijing buy an extra $200 billion of U.S. products over a two-year period, according to Washington officials. China has yet to publicly confirm the figures.
The Trump administration called off new tariffs on Chinese-made goods such as electronics that were to take effect last month. It also halved those imposed on Sept. 1 on $120 billion worth of products.
But Washington maintains 25 percent tariffs on about $250 billion worth of Chinese imports.
In a further sign of de-escalation, Washington on Monday removed the currency manipulator label it imposed on China in the summer.
At a news conference Tuesday, spokesman for the customs administration Zou Zhiwu said that since November and December, Chinese imports from the U.S. including of soybeans and pork have picked up.
Zou added that the increased imports from the U.S. will not affect China’s purchases from other countries.
He also said the trade tensions had “put some pressure on China’s foreign trade and firms that largely trade with the U.S.”
“Although our exports to the U.S. have declined, the effectiveness of enterprises diversifying their markets has been significant,” he said, adding that exports to non-U.S. markets have risen and overall exports are still rising.
The signing of the new trade deal, which is part of a planned wider pact, will have an “important and positive significance” not just for China and the U.S. but also the rest of the world, Zou said.
China’s foreign trade volume fell slightly year on year in 2019, and its surplus with the world stood at $421.5 billion.
In December, China’s exports rose 7.6 percent year on year, better than the 2.9 percent forecast in a Bloomberg News survey. Imports surged 16.3 percent, far exceeding estimates.
For the full year, exports rose 0.5 percent while imports fell 2.8 percent.
Meat imports spiked over the past 12 months as officials brought in 2.108 million tons of pork — a 75 percent increase from the year before, while beef imports rose 60 percent.
The huge jumps come as the country’s pork supply is hammered by an outbreak of African swine fever that has wiped out about 40 percent of the national pig herd.
Nick Marro at the Economist Intelligence Unit said China’s overall export recovery in December is likely due in part to a low base of comparison from the year before.
“It was around this time last year when we first started to see the impact of both the trade war and the global electronics slowdown bite into China’s trade data,” he added.
While shipments to Europe and Southeast Asia are up, Marro said these markets cannot fully replace the U.S.
“However, China’s efforts to pivot towards alternative sources of demand, as a cushion to lost U.S. market access, may be starting to pay off,” he said, adding that growth in shipments to Vietnam outperformed every other major export market.