By Ethan Wang and Joe Cash
BEIJING (Reuters) – China’s exports growth likely slowed in the January-February period, partly due to Lunar New Year disruptions, as escalating tariff pressures from the United States clouded the economic outlook.
Outbound shipments were expected to have risen 5% from the previous year in value terms, the median forecast of 23 economists polled by Reuters showed, down from a 10.7% expansion in December.
Imports in the first two months of the year likely rose 1%, maintaining December’s pace.
Shipments from South Korea, a leading indicator of China’s imports, fell 1.4% in February, Korean data showed this month.
To account for distortions from the shifting Lunar New Year holidays, which fell between January 28 and February 4 this year, China’s General Administration of Customs publishes combined trade data for the first two months.
An official survey released earlier this month showed China’s manufacturing activity expanded at the fastest pace in three months in February, with new export orders still declining but at a slower pace.
“There doesn’t appear to be any significant immediate impact from the first round of U.S. tariffs in February,” said Lynn Song, chief economist for Greater China at ING.
Still, analysts warn more trade risks are on the horizon as Beijing finds itself in an escalating trade war with Washington that could cripple China’s export strength.
China has set a bullish economic growth target of around 5% this year, while expanding the budget deficit ratio to around 4% of gross domestic product, Premier Li Qiang announced at the opening of the annual parliament meeting on Wednesday.
The economic goals came just a day after U.S. President Donald Trump slapped an extra 10% duty on Chinese goods, doubling the levies on imports from China to 20%. The White House said the move was a response to China’s perceived inaction over fentanyl flows.
China responded swiftly, announcing additional tariffs of 10-15% covering $21 billion worth of American agricultural and food products, while placing export and investment curbs on 25 U.S. firms, citing national security concerns.
Beijing has also signalled further countermeasures if Washington escalates.
“If the U.S. has another agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” a Chinese foreign ministry spokesperson said on Tuesday.
Analysts say while China still hopes to negotiate a truce on tariffs, each escalation reduces the chance of a rapprochement.
China’s January-February trade surplus is forecast at $142.35 billion, up from $104.84 billion in December. The trade data will be released on Friday.
(Reporting by Ethan Wang and Joe Cash; Polling by Susobhan Sarkar and Pranoy Krishna in BENGALURU and Jing Wang in SHANGHAI; Editing by Sam Holmes)
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