Continue Reading Below
U.S. imports from China fell 12 percent in the first six months of the year, compared to the year-ago period. Exports, meanwhile, dropped about 19 percent, according to U.S. Commerce Department data. In total, trade between China and the U.S. totaled about $271 billion. The Wall Street Journal first reported the news.
Mexico, instead, supplanted China as the No. 1 trading partner of the U.S.
Negotiations between Washington and Beijing have been slow. A months-long tariff truce ended on Thursday when President Trump threatened to slap a 10 percent tariff, starting Sept. 1, on an additional $300 billion worth of Chinese goods, irked by the Chinese delegation’s behavior during the most recent trade talks.
China, in response, warned that it would retaliate with its own tariffs if the latest import tax goes through. Reuters reported that during a press briefing, China’s spokesperson at the foreign ministry, Hua Chunying, said that Beijing was willing to take the necessary countermeasures.
The latest tariff hikes come on top of a separate tariff imposed by the U.S. on $250 billion worth of Chinese goods.
The next round of talks between the two countries are scheduled to take place in September.
Trade war concerns have weighed on the global economy since they started more than one year ago. Federal Reserve Chairman Jerome Powell cited the tit-for-tat tariff war as one of the reasons the U.S. central bank cut rates for the first time in a decade this week -- and said policymakers will continue to monitor any new developments.
It’s hit China’s economy particularly hard, however. In July, the Washington-based International Monetary Fund upgraded its forecast of U.S. growth to 2.6 percent from 2.3 percent, while lowering its outlook for Chinese growth.
In the country-by-country evaluation, the IMF said it expects the effect of tit-for-tat tariffs and weakening external demand to add pressure to China’s already cooling economy. Growth is forecast at 6.2 percent in 2019, and 6 percent in 2020 – about 0.1 percentage point lower, compared to the IMF’s April outlook.