China’s trade surplus with US hits record $31 billion

[SBUS-CXK]

BEIJING (AP) — China’s trade surplus with the United States widened to a record $31 billion in August as exports surged despite American tariff hikes, potentially adding fuel to President Donald Trump’s battle with Beijing over industrial policy.

Exports to the United States rose 13.4 percent to $44.4 billion, ticking up from July’s 13.3 percent growth, according to customs data. Imports of U.S. goods rose 11.1 percent to $13.3 billion, decelerating from the previous month’s 11.8 percent.


That could help reignite U.S. demands that Beijing narrow its trade gap, which has temporarily been overshadowed by their clash over complaints China steals or pressures foreign companies to hand over technology.

The two sides have imposed 25 percent tariffs on $50 billion of each other’s goods. The Trump administration is deciding whether to extend penalties to another $200 billion list of Chinese imports. Beijing says it will retaliate.

With no settlement in sight, the spiraling conflict between the two biggest economies has fed fears it will chill global trade and economic growth.

The Commerce Ministry expressed confidence Thursday that China can maintain “steady and healthy” economic growth despite the trade pressure.

On Friday, Trump he was ready to step up pressure by raising tariffs on yet another $267 billion list of Chinese imports. That would mean penalties cover almost all goods from China sold to the United States.

Chinese leaders have rejected pressure to scale back plans for state-led development of global champions in robotics and other technologies.

Their trading partners complain those violate Beijing’s free-trade commitments and U.S. officials worry they might erode American industrial leadership. But communist leaders see their industry plans as the path to prosperity and global influence.

As tensions mounted, Beijing agreed in May to narrow its trade gap with the United States by purchasing more American soybeans, natural gas and other exports. Chinese leaders scrapped that deal after Trump’s first tariff hikes hit.

Chinese exporters of lower-value goods such as handbags and surgical gloves say U.S. orders have fallen off. But sellers of factory machinery and other more advanced exports express confidence they can keep their U.S. market share.

The Chinese customs agency took the rare step of announcing August trade data on Saturday instead of a working day. That would give financial markets a chance to digest the politically sensitive data before trading opens Monday.


The Chinese trade gap with the United States was up from July’s $28 billion and June’s $29 billion. Beijing reported a record $275.8 billion trade surplus with the United States last year.

Forecasters had said China’s sales to the United States, its largest national export market, might weaken after manufacturers rushed to fill orders ahead of Trump’s first tariff hike July 6. But trade data have yet to show a significant impact.

China’s global exports rose 12.2 percent to $217.4 billion, down from July’s 12.6 percent. Imports rose 20.9 percent to $189.5 billion, down from 21 percent.

The country’s global trade gap was $27.9 billion. That meant that without sales to the U.S. market, China would have run a trade deficit.

China regularly runs deficits with many of its trading partners that supply oil, industrial components and other imports and pays for those by running a surplus with the United States and Europe.

Exports to the 28-nation European Union, China’s biggest trading partner, rose 11 percent to $37 billion. Imports rose 15 percent to $24.9 billion, leaving a surplus of $6.1 billion.

https://www.apnews.com/26c7231a5e0d4dc5945c275e1cd2e9c6

 

[TaiShang]

Let a US regime official to daily convince that the US is winning.

I did not hear today's briefing on winning yet. Perhaps late night, Trump will tweet about that.

 

[Chinese-Dragon]

I guess Donald Trump (or at least his advisors) understand basic economic theory... however Trump voters do not. So he can keep tricking them for as long as he wants, by the time they realise what he has done, it will be too late.

These are the questions they need to ask:

1) Given the relationship of the current account to saving and investment, how will Trump's trillions in tax cuts and massive spending plans possibly reduce their current account deficit? Or the budget deficit, or national debt?

2) How will a worldwide trade war, which is universally considered a bad idea by most economists, possibly improve the current account deficit?

@jhungary

 

[TaiShang]

I guess Donald Trump (or at least his advisors) understand basic economic theory... however Trump voters do not. So he can keep tricking them for as long as he wants, by the time they realise what he has done, it will be too late.

These are the questions they need to ask:

1) Given the relationship of the current account to saving and investment, how will Trump's trillions in tax cuts and massive spending plans possibly reduce their current account deficit? Or the budget deficit, or national debt?

2) How will a worldwide trade war, which is universally considered a bad idea by most economists, possibly improve the current account deficit?

@jhungary

Soaring by $38,000 per second: US national debt now exceeds $21.5 trillion

Published time: 3 Oct, 2018 09:37
Edited time: 3 Oct, 2018 09:50

A protester dressed as a panhandling Uncle Sam stands in New York's Time Square © Brendan McDermid / Reuters


The latest data from the US Treasury Department shows America’s gross national debt ballooned by $1.2 trillion to a breathtaking $21.52 trillion on September 28, the last day of fiscal year 2018.

During that period, the US national debt increased by 6.3 percent and now amounts to 105.4 percent of the country’s current-dollar Gross Domestic Product (GDP).

According to the Treasury Department’s Bureau of the Fiscal Service, the national debt at the end of fiscal year 2017 was an estimated $20.25 trillion. The large deficit is a result of federal benefit payments pushed into August instead of September, the service said.

US Gross National Debt Soars $1.27 Trillion In Fiscal 2018, Hits $21.5
Trillion https://t.co/vvoWTmnNDKpic.twitter.com/zVhLATj3Ou

— Confluence Intel (@ConfluenceIntel) October 2, 2018

“Where the threshold is too high, we don’t know. But rising forever is definitely an unsustainable, big problem. And we’re the only advanced economy on an unsustainable course,” economist Jason Furman at Harvard’s Kennedy School of Government told the Public Radio International (PRI).

“We’re the only advanced economy where the debt is expected to rise as a share of GDP over the next five years. All the other advanced economies, it’s falling,” he added.

via GIPHY

The budget deficit hit $214 billion in August, which is double the amount compared with the same period a year ago.

The Congressional Budget Office (CBO) estimates that the “deficit” will be $895 billion in fiscal 2018. It said that in just a few years the US will be paying more in interest to pay down the national debt than on the military or Medicare.

Think #Trump’s economy is booming? It’s a corporate debt bubble blowing up – @KeiserReporthttps://t.co/1yu3r9Zd7M

— RT (@RT_com) September 26, 2018

“The fact that we are in the 10th year of an economic expansion now and debt keeps rising is really extraordinary and very irresponsible. Unless Congress fundamentally changes its path, we are headed for a Greek-type crisis,” said Chris Edwards, director of tax policy studies at the Cato Institute, a think tank in Washington.

He explained: “A rising debt could create this crisis situation where interest rates spike, the government has to take drastic actions, perhaps cutting benefits, social security and other benefits radically, or hiking taxes dramatically, which will damage the economy.”

https://www.rt.com/business/440190-us-national-debt-soars/

 

[Chinese-Dragon]

Soaring by $38,000 per second: US national debt now exceeds $21.5 trillion

Trump is trying to ruin America, by cutting trillions in taxes and putting through colossal spending plans, even though America already has the worst trade deficit, national debt and budget deficit in the world (by far). Not to mention declaring a trade war against the entire world.

Ironically it is China who is trying to stop the USA collapsing by lending them ever larger sums of money.

If China started dumping treasury bonds, everyone would start dumping treasury bonds, before their value falls to zero. And then China will have its hands full of worthless US treasury bonds.

China is the one benefiting the most from the current world order, whereas Trumpland is putting a gun to their own head and threatening to commit suicide. What can we do if they want to destroy themselves?

 

[moweike]

This is the American dream, In dreams, it defeats China.----------I will not be stingy to support,Trump 2020

 

[LeGenD]

@Chinese-Dragon
@TaiShang

Debt have different forms and they are to an economy what liabilities are to an organization.

Study this article: https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778

Two noteworthy points:

[1] Two-thirds is debt held by the public. The government owes this to buyers of U.S. Treasury bills, notes, and bonds. That includes individuals, companies, and foreign governments. The remaining third is intragovernmental debt. The Treasury owes this to its various departments who hold Government Account securities. Social Security and other trust funds are the biggest owners. They have been running surpluses for years. The federal government uses these surpluses to pay for other departments. These securities will come due as baby boomers retire over the next two decades. Since Social Security and trust funds are the largest owners, the answer as to who owns the U.S. debt the most would be: everyone’s retirement money.

[2] Third, countries like China and Japan buy Treasurys to keep their currencies low relative to the dollar. They are happy to lend to America, their largest customer, so it will keep buying their exports. Even though China warns the United States to lower its debt, it continues to buy Treasuries. But China has lowered its holdings of U.S. debt.

US is not taking loans from an external entity (e.g. IMF) to manage its balance of payments and for development - hallmark of a viable economic structure. US have excellent earning potential.

Trump lowered taxes to stimulate economic growth. And American economic growth look good, so far.

Global Debt to GDP ratio ranking: https://tradingeconomics.com/country-list/government-debt-to-gdp

Japan have highest in the world.

People - who misunderstand American economic system - present a gloomy picture as American debt continue to appreciate. However, investors know better.

Reality is that as American economy will grow, its debt level will also appreciate - corresponding developments.

---

Trump is finalizing trade deals with different countries such as USMCA, KORUS and UJFTA. His agenda is to renegotiate trade deals with important trading partners in a way that the new arrangements will reduce American trade deficit in the long-term.

Problem with China persist but I believe that US and China will address this problem at some point.

US is also exploring ways to reduce its reliance on oil imports. Shale revolution is a step in this direction. Eco-friendly energy structure is next.

 

[TaiShang]

Trump is trying to ruin America, by cutting trillions in taxes and putting through colossal spending plans, even though America already has the worst trade deficit, national debt and budget deficit in the world (by far). Not to mention declaring a trade war against the entire world.

Ironically it is China who is trying to stop the USA collapsing by lending them ever larger sums of money.

If China started dumping treasury bonds, everyone would start dumping treasury bonds, before their value falls to zero. And then China will have its hands full of worthless US treasury bonds.

China is the one benefiting the most from the current world order, whereas Trumpland is putting a gun to their own head and threatening to commit suicide. What can we do if they want to destroy themselves?

Interesting how they attack right and left, ally and enemy, without bias. That's called absolute power diplomacy, I guess. It is like the strong survival instinct of a person that is about to go nuts soon.

US power is no problem to handle. Bring in MAD, and all is set.

US irrationality is the difficult problem to handle. Two absolute nuclear powers, China and Russia combined, are having difficulty in containing the madness.

Now the EU is joining the CN-RU camp; let's see the three will be able to contain the virus.

***

Good Job! Washington Angered Enough Countries to Provoke a Joint Response to Its Sanction War

Heck, even the UK is on board for this one

Grete Mautner
Lately, an ever increasing number of states started expressing their dissatisfaction with Washington’s protectionist policies, thus forming a group states that are determined to oppose unfair trade practices on the international stage. Therefore, there’s little surprise that the UN general assembly in New York turned into a show of solidarity against the White House and what it stands for on 25 September. The frustration of various states over Washington’s unilateral withdrawal from the Iran deal (JCPOA), turned this state into a symbol of an opposition to dubious policies introduced by the Trump administration and its unilateralism.

It’s been
pointed out by Wirtschaftswoch that the rift between Washington and Brussels on Iran came on the back of a trade war Donald Trump started with Europe and China. It resulted in a number of European states trying to search for ways to bypass Washington’s newly reintroduced anti-Iranian sanctions.

Unsurprisingly, the European Union, Iran, China and Russia have come up with a joint plan to sidestep unilateral American sanctions designed to cripple the Iranian economy. Representatives of these states are convinced that Tehran is going to remain fully compliant with the terms of the nuclear deal, that is why they are going to do everything that is in their powers to preserve it.

All of them have repeatedly expressed “deep regret” over Trump’s decision to kill the deal, while pointing out that sanctions and so-called trade tariffs that the White House has been busy introducing go against the multilateral diplomacy endorsed unanimously by the UN Security Council. In the past both Russia and the EU had their contradictions on a number of issues, by now it seems that they’ve managed to put it aside to unite against the US.

As it’s been laid out by European foreign policy chief Federica Mogherini alongside Iranian foreign minister Javad Zarif in the margins of the UN assembly:

EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world.

France’s president Emmanuel Macron has also attacked Trump for fomenting “nationalism” and “protectionism” in his UN speech, while pointing out that the EU is being pushed around by Washington’s unilateral decisions, that are made detriment of everyone as they lead to isolation and conflict. After delivering this speech at the 73rd session of the UN General Assembly, Macron added that there’s an acute need to strengthen the economic and financial sovereignty of the EU.

Earlier last month, German foreign minister Heiko Maas urged Europe to resist unilateral American sanctions, while pointing out that the EU shouldn’t “sit like a rabbit in front of a snake.” In an interview with Bild, he added that he was appalled by a number of public statements that Donald Trump made, in which he described the EU as an opponent of the EU, alongside with Russia and China.

There’s been a lot of voices urging Europe to take responsibility for its security into its own hands, thus returning back its sovereignty. Last August, prominent political figures in both Paris and Berlin were particularly articulate in promoting this notion. What this basically means is that the two leading countries are determined to spearhead resistance of the EU to Washington’s unilateral practices. The fact that similar statements could be heard at the same time both in Berlin and Paris was a coincidence, but the ideas that were laid out in those could hardly be described as surprising. It’s curious that Emmanuel Macron made such a statement at a meeting with French ambassadors in Paris, just like Heiko Mass that pointed this notion out while also foreign ministry staff in Berlin.

It was rather unexpected that even the UK, which has been an adamant supporter of Washington’s designs for decades, has also chose to disagree with the United States on JCPOA. London is confident that Iran is fulfilling all the criteria of the deal, which was pointed out by Britain’s PM Theresa May in one of her speeches, which come as a surprise to international analysts.

In a bid to protect its interests on the international stage, the US is now following in China’s and Russia’s tracks in starting a process of diminishing the role of dollar in the financial transactions made across the union. Thus, it becomes increasingly evident that the Trump administration is contributing to a future demise of the global dollar system, even if that is hard to see right now. It’s been pointed out that the “America first” foreign policy, the trade wars and seemingly arbitrary nature of tariffs, trans-Atlantic tension and other geopolitical rivalries are all factors that could push the dollar off of its perch.

As it’s been pointed out by an analyst for the Arms Control Association, Kelsey Davenport in his interview for the Washington Post:

In the Iran case, the United States is damaging sanctions as a tool of statecraft, as it has put a lot of states between a rock and a hard place.

The growing effort aimed at conducting euro-denominated oil sales, combined with a smattering of other initiatives intended to weaken the influence of Washington’s financial dominance, could chip away at the dollar big time. American analysts argue that the dollar remains all-powerful, yet they seem to all agree that the Trump administration’s aggressive use of sanctions, crystallized by its zero-tolerance sanctions campaign against Iran, could undermine its role on the financial markets, as an ever increasing number of states adopt the idea that of the world coming up with a joint response to Washington’s unilateralism.

Source: New Eastern Outlook

 

[Chinese-Dragon]

@Chinese-Dragon
@TaiShang

Debt have different forms and they are to an economy what liabilities are to an organization.

Study this article: https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778

Two noteworthy points:

[1] Two-thirds is debt held by the public. The government owes this to buyers of U.S. Treasury bills, notes, and bonds. That includes individuals, companies, and foreign governments. The remaining third is intragovernmental debt. The Treasury owes this to its various departments who hold Government Account securities. Social Security and other trust funds are the biggest owners. They have been running surpluses for years. The federal government uses these surpluses to pay for other departments. These securities will come due as baby boomers retire over the next two decades. Since Social Security and trust funds are the largest owners, the answer as to who owns the U.S. debt the most would be: everyone’s retirement money.

[2] Third, countries like China and Japan buy Treasurys to keep their currencies low relative to the dollar. They are happy to lend to America, their largest customer, so it will keep buying their exports. Even though China warns the United States to lower its debt, it continues to buy Treasuries. But China has lowered its holdings of U.S. debt.

US is not taking loans from an external entity (e.g. IMF) to manage its balance of payments and for development - hallmark of a viable economic structure. US have excellent earning potential.

Trump lowered taxes to stimulate economic growth. And American economic growth look good, so far.

Global Debt to GDP ratio ranking: https://tradingeconomics.com/country-list/government-debt-to-gdp

Japan have highest in the world.

People - who misunderstand American economic system - present a gloomy picture as American debt continue to appreciate. However, investors know better.

Reality is that as American economy will grow, its debt level will also appreciate - corresponding developments.

---

Trump is finalizing trade deals with different countries such as USMCA, KORUS and UJFTA. His agenda is to renegotiate trade deals with important trading partners in a way that the new arrangements will reduce American trade deficit in the long-term.

Problem with China persist but I believe that US and China will address this problem at some point.

US is also exploring ways to reduce its reliance on oil imports. Shale revolution is a step in this direction. Eco-friendly energy structure is next.

Firstly, Trump cut trillions in taxes and put through massive spending plans while already having the largest budget deficit, trade deficit and national debt in the world. Where is the money coming from? That's right... endless amounts of borrowing.

Secondly, Trump has launched a trade war against the entire world with his steel and aluminium tariffs. The only two countries in the world that have an exemption from those tariffs are Australia and Argentina.

Neither of these actions makes sense of Trump is trying to reduce America's trade deficit and budget deficit, and they are ballooning to record levels as we speak.