May 2018 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral trade: In the first quarter of 2018, the U.S. goods trade deficit with China grew about 15.5 percent year-on-year due to increased imports; in services, the United States reached record high trade surplus with China in 2017, but export growth was the lowest in over 13 years.
• Bilateral policy issues: U.S. Department of Commerce bans U.S. firms from exporting to ZTE due to ZTE’s repeated violations of its settlement with U.S. authorities; Chinese government strengthens long-standing policies to replace foreign technology with domestic equivalents; the EU and Japan join the United States in a challenge of China’s licensing regulations, while the EU joins China in its request for consultations regarding Section 232 tariffs; Beijing increases retaliatory pressure on the U.S. agriculture sector by imposing a 178.6 percent antidumping deposit on U.S. sorghum; 82 percent of all U.S. agriculture exports to China are subject to planned or enacted retaliatory Chinese tariffs.
• Quarterly review of China’s economy: The Chinese economy grew 6.8 percent year-on-year in the first quarter of 2018, benefitting from strong consumer demand and increased real estate investment.
• Policy trends in China’s economy: At the Boao Forum, President Xi pays lip service to globalization and economic liberalization, but offers modest commitments.