China’s exports and imports shrank last month, but by less than expected. Trade war tariffs to be rolled back, China says, but reports from Trump administration are conflicting.
Slouching Tiger, Bed-ridden Dragon: In October, China’s exports fell by 0.9% Y-o-Y – for the third straight month. And imports shrank by 6.4% - for the sixth consecutive month. The negative numbers were due to the US-China trade war that continues to drag on.
However, a partial truce that was reached with Washington recently – and prospects of a trade deal, which could be announced soon – cushioned the fall. The drop in exports was less than the 3.9% forecast by analysts and September’s 3.2% contraction. Similarly, September’s imports decline was 8.5% and October’s forecast had been 8.9%. Reuters
What’s the Deal?: China’s Commerce Ministry recently announced that Beijing and Washington have agreed to mutually roll back tariffs as part of a “phase one” trade accord. Markets rose on the news, but details remain unclear. And questions remain over which or how many tariffs will be rolled back.
The Commerce Ministry spokesman said, “If the phase-one deal is signed, China and the US should remove the same proportion of tariffs simultaneously based on the content of the deal ... This is what [the two sides] agreed on following careful and constructive negotiations over the past two weeks.”
However, reports from within the Trump administration were conflicting, and a “phase one” trade deal is still not the same as the comprehensive trade accord that will be required to end the ongoing trade war. WSJ
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