September 2018 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral trade: The U.S.-China goods trade deficit reached $36.8 billion in July 2018, the highest monthly deficit on record.
• Bilateral policy issues: President Trump signs FIRRMA into law, expanding CFIUS’s authority to screen foreign investment for national security threats; midlevel U.S. and Chinese financial officials meet to resume trade negotiations but accomplish little.
• Policy trends in China’s economy: Beijing is shifting toward monetary stimulus, stepping up efforts to boost bank lending amid cooling economic growth and fears that an intensifying trade conflict with the United States might trigger a sharper slowdown; China introduces new measures to curb risks from peer-to-peer lending in response to rising defaults across the industry; Chinese regulators enhance controls on currency movements, stabilizing the renminbi exchange rate after months of rapid depreciation against the dollar; although the Hong Kong Stock Exchange’s revised listing rules have improved its global competitiveness, the number of Chinese firms listed and the amounts raised are below initial expectations.
• Sector Focus – Pork: According to the U.S. Department of Agriculture, U.S. pork exports to China fell by 27 percent in May, then 19 percent in June relative to the previous year; Chinese tariffs on U.S. pork were raised to 62 percent in early July.