China's Three-Year Run of Monthly Trade Surpluses Surprisingly Hits Wall
- Author: Todd Kelly Mar 10, 2017,
Mar 10, 2017, 0:16
United States stocks fell as healthcare stocks took a beating after Mr. Trump tweeted about lowering drug prices. The deficit was in line with economists forecasts.
The report said the trade deficit widened to $48.5 billion in January from $44.3 billion in December, matching expectations.
The economy grew at a 3.5 percent pace in the third quarter. But he said the impact wouldn't be as severe as in the fourth quarter, when trade trimmed growth by 1.7 percentage points.
The dollar was trading little changed against a basket of currencies, while prices for USA government bonds slipped. USA stock index futures were slightly lower.
This come after President-elect Donald Trump pledges to implement protectionist trade policy and impose heavy tariffs on imports into the U.S. That was the largest amount since July 2013. The value of petroleum imports was the highest in two years.
The price of imported oil averaged $43.94 per barrel in January, the highest since August 2015.
There was a strong increase in consumer goods imports for the month with a notable increase in cell phones and other household goods. There were also increases in imports of automobiles, which hit a record high. "With growth in China now running above trend and both monetary and fiscal policy being tightened, it is only a matter of time before we see a slowdown in domestic demand".
China slapped a surprise ban in mid-February on imports from North Korea, the country's main supplier of anthracite coal.
The holiday began in late January this year and in February last year.
Falling exports and rising imports weighed on overall economic output in the final three months of 2016.
Exports to Germany tumbled 10.7 per cent. He says, "President Trump has made free and fair trade a central part of his agenda, and correcting this imbalance is an important step in achieving that goal".
The government work report delivered by Premier Li Keqiang Sunday said China would ensure that foreign trade continues to pick up with policies to optimize imports and exports.
But exports unexpectedly fell 1.3%, giving a trade deficit of $9.2bn for the month.
"The deficit, in combination with the increase in China's forex reserves revealed yesterday, also suggests that capital outflows have narrowed sharply recently", Julian Evans-Pritchard of China Economist said in a note.