China’s exports rose an annual 8.3% last month, customs data showed on Monday, beating a 6% increase in a Reuters poll and registering the fastest growth since March, reports Reuters. They compared with a 4.4% increase in August. While the faster export growth is welcome news for a still-fragile economy, Trump’s latest threat to raise US tariffs above 100% would deal a deflationary shock to China and put smaller exporters and jobs of factory workers at risk.
The world’s second-largest economy has greatly diversified its export markets this year to insulate itself from US President Donald Trump’s 35-percentage-point tariff hikes, helping to keep GDP growth on track towards a roughly 5% target for the year. However, this strategy could get a reality check should Trump carry out his threat of re-imposing triple-digit tariffs on China in retaliation for Beijing announcing sweeping rare earth export controls last week.
“While China’s economy has proven more resilient in the face of US tariffs than many had feared, there is still significant potential downside from a deeper rift with the US,” said Capital Economics analyst Julian Evans-Pritchard.