China imports of US big cars plunge 70%; oil, gas, cotton and other commodity imports also collapse in new trade war

[NEW YORK] China’s imports of US cotton, cars and some energy products all plunged in the first two months of the year after President Donald Trump started imposing tariffs and Beijing retaliated.

In a prelude to what could be widespread disruption to global trade, Chinese purchases of cotton fell almost 80 per cent from a year earlier, according to Bloomberg analysis of data released on Thursday (Mar 20). Imports of large-engined cars were down nearly 70 per cent, while purchases of crude oil and liquefied natural gas dropped more than 40 per cent.

All these goods were subject to Chinese retaliatory tariffs either in February or March.

The tit-for-tat trade war measures that the US and China have imposed on each other over the past six weeks – and the probability of more to come in the months ahead – are creating huge uncertainty and raising costs for businesses across the region.

Firms are already reacting, with Chinese companies cutting the export of small parcels in February. Meanwhile, Walmart and others in the US are asking for price cuts to compensate for the levies.

Some US goods targeted by China actually saw growth. Soybean imports rose almost 50 per cent to reach US$4.2 billion ahead of the new levies that China imposed in March.

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And purchases of processors and chips nearly doubled, helping overall imports from the US increase 2.7 per cent to almost US$27 billion in the first two months of this year, according to data released earlier.

Imports of machinery used to make semiconductors fell by a third in the first two months of this year, the data showed.

The US has been ramping up export restrictions on the high tech machinery for years, although Chinese companies have continued to purchase less advanced instruments. BLOOMBERG