China's exports unexpectedly accelerated in June and its trade surplus with the United States hit a record high in a positive sign for the economy, though the overall result looks set to keep a bitter trade dispute with Washington on the boil for a while longer. Both official and private business surveys reported softer export orders last month as the trade row deepens.
Asked if China was breaking WTO rules by imposing retaliatory tariffs on United States goods without first launching a formal legal dispute, Wang said China could not wait years for a ruling on the U.S. move and had acted "in line with the spirit of global law".
But signs exporters were rushing shipments before tariffs went into effect in the first week of July suggest the spike in the surplus was a one-off, with analysts expecting a less favourable trade balance for China in coming months as duties on exports start to bite.
The United States has started a trade war and China will defend itself, Chinese vice-minister of commerce Wang Shouwen said on Thursday (July 12), urging the United States to "take the gun" of tariffs away to smooth the way for talks.
"Still, we do not expect a plunge because those tariffs only targeted $34 billion worth of goods which is fairly small compared to China's total trade", she said. Its trade surplus with the United States over the same period was $133.76bn, up from $117.51bn a year ago.
While China continues to benefit from strong global demand for its goods for now, the rising trade tensions with the USA has the potential to hurt both sides.
US President Donald Trump had already threatened to impose additional tariffs if China - the world's largest exporter - retaliates.
But in a statement from its commerce ministry, China blamed those problems on the U.S., saying the imbalance was "overestimated" and caused by America's own "domestic structural problems".
"Targeting such a large amount of basic consumers will inevitably have an effect on United States inflation". The politically volatile trade surplus with the United States widened by 14.2 per cent to $29 billion.
After a strong start to the year, growth in China's exports has moderated recently, and is expected to face more pressure from the initial round of U.S. tariffs.
Trump's latest tariffs threat hammered global markets, while there are worries that his decision to pick fights with other key allies including Canada and the European Union could fuel an all-out global trade war.
But, he said, China has another option - Beijing could reduce the impact of USA tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.