China Exports Dropped in March amid Escalating Tensions in Trade War

China’s exports dropped unexpectedly in March which has been drop over a year since February 2017. This has raised concerns regarding the status of the one the primary growth drivers amid rising tension with the United States.  

March import has performed better saying that the domestic demand is strong enough in reaction from sudden blows and any trade shocks. However, this caused a rare trade deficit for this month since the drop in February.

China’s exports slid by 2.7 percent than a year earlier trailing behind from the 10.0 percent increase and an unexpectedly abrupt decline of 44.5 percent rise in February, which was affected by various seasonal factors. Exports still rose for 14.1 percent in the first quarter.

A pullback is likely to occur in March, some analysts say when there are more shipments prior to the Lunar New Year holiday in mid-February besides the atypical strong start of the year. The situation did not change the mood as the global demand remains strong.

However, a strong currency could affect the competition between Chinese exporters. The Chinese yuan rose 3.7 percent against the U.S. dollar in the first quarter this 2018 over the 6.6 percent gain in 2017.

In regards to the actual imposition of tariffs by either Beijing or America, no specific timeline has been set yet which opens negotiations and adjustments that could bring damage to either side and other trade-reliant economies.

Although, analysts said that threats relative to trade war already has an impact on the hustle and bustle of exports.

Almost a third of China’s exports to the United States will be affected by the imposition of tariffs and companies may prepare early this year before this gets implemented, according to economists at Nomura.

Exports are anticipated to slow down as the yuan value rises and tightening trade tensions. Nonetheless, the solid global growth outlook could act as a cushion. China’s exports could get stronger than the growth of exports since the Asian nation has vowed to increase imports, commented by an economist at Nomura in Hong Kong.