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US exports fall amid escalating trade war with China
[WASHINGTON] US exports weakened across the board in June amid a global economic slowdown, as President Donald Trump's trade war with China intensifies, according to government data released Friday.
America's mammoth trade deficit held steady in June as imports also declined along with foreign demand for US goods and services.
The falling exports and deteriorating trade picture comes as Mr Trump escalated its aggressive tariffs plan against Beijing, threatening to impose new 10 per cent duties on US$300 billion in Chinese goods on September 1, on top of previous similar measures.
Beijing has pledged to retaliate with "countermeasures." Economists say the tit-for-tat battle is helping to weaken global growth and international commerce.
The US trade gap dipped a token 0.3 per cent to US$55.2 billion in June, but exports are falling faster than imports, according to the Commerce Department report.
Despite Mr Trump's tough tactics, which he says will protect US jobs and reduce the trade gap, the deficit in the first half of 2019 is 7.9 per cent higher than in the same period last year - and could weigh on GDP growth in the second quarter.
The US Federal Reserve this week cut the benchmark lending rate, citing the uncertainty caused by trade policy.
Mr Trump's new tariffs threat would add to the 25 per cent tariffs already levied on US$250 billion in imports.
"Until such time as there is a deal, we will be taxing the hell out of China," Mr Trump said during a campaign rally in Cincinnati on Thursday.
But the deficit with China, Mr Trump's greatest source of ire, was largely unchanged at US$30.2 billion in June, leaving it down 10.3 per cent in the first half of 2019.
Beijing already has responded with tariffs on all US$110 billion in products imported from US companies, but has previously hinted it could restrict exports of rare earths that are vital to the US technology industry, and it is also drawing up a blacklist of "unreliable" foreign companies.
Economists warn that the escalating tensions could undermine a global economy already dealing with the slowdown in China and Europe. Meanwhile, Brexit is looming.
The US trade picture dimmed overall in June as exports of passenger cars, gems and computer accessories all fell, as did sales of telecommunications equipment, industrial machinery and jewelry.
The deficit with Mexico continued to rise, hitting US$9.2 billion, its highest monthly level since at least as far back as January 2009, with exports across the southern border falling faster than imports. That deficit has risen more than 35 per cent this year.
Trade with the European Union weakened as imports fell, driving the deficit down 5.9 per cent to US$15.9 billion.
And the US surplus in services, the dominant sector of the American economy, declined last month.