Months of trade war have taken a toll on both economies, with Chinese cos and US farmers selling less
The unexpected drop in China’s exports in November shows one reason why the nation wants to agree on a phase one trade deal — US tariffs are hurting China’s exports at a time when global demand is already weak.
Total exports in November dropped 1.1% from a year ago, and to the US they were down 23%, the customs administration said on Sunday. That was the worst result for exports to the US since February and the 12th straight monthly decline. Overall shipments had been expected to rise 0.8%, as retailers and companies stock up before the Christmas shopping season.
About 18 months of tit-for-tat tariffs have damaged both economies, with Chinese companies and American farmers selling less to the other side. When the two sides agreed to work on a ‘phase one deal’ in October there was hope that it would lead to a quick resolution of at least some of the underlying issues. However negotiations have stretched out and even if some of the tariffs are removed, both sides will be economically worse off than they would have been without the conflict.
“Weak global demand, especially in major trading partners such as the US, EU and Japan, has dragged on export growth” and the weaker yuan in November cut the dollar value of exports, said Wang Youxin, a researcher at the Bank of China Institute of International Finance. “Looking ahead, exports depend on the progress of the trade talks. If the phase one deal is reached, and there’s rollback of tariffs, companies may become more confident and exports could rise.”
