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China’s March Trade Data Offered Mixed Signals

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Apr. 15 2019, Published 2:36 p.m. ET

China’s March trade data

Last week, China released its trade data for March. The country’s exports in US dollar terms rose 14.2%, while its imports fell 7.6% YoY. The data offered mixed signals to markets with exports beating expectations but imports lagging analysts’ estimates. China’s imports have fallen on a YoY basis for four consecutive months, and the pace of contraction expanded in March. In February, China’s exports had fallen 5.2% YoY.

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Trade surplus

Meanwhile, thanks to fewer imports and higher exports, China’s trade surplus also rose in March. According to Reuters, China’s trade surplus stood at $32.64 billion in March. The country’s trade surplus with the United States (SPY) also rose to $20.5 billion in March, up from $14.72 billion in February. China’s trade surplus with the United States had fallen sharply in February. However, in the fourth quarter, China’s trade surplus had ballooned as several US companies front-loaded their imports to escape the tariff hike that was scheduled for this year.

Tariff hike

However, the tariff hike was indefinitely postponed amid positive progress in US-China trade talks. Apple (AAPL), Caterpillar (CAT), and NVIDIA (NVDA) are among the companies that have been hit by China’s slowdown. Last year, Amazon (AMZN), Facebook (FB), and Walmart (WMT) had opposed the tariffs on China (BIDU) (JD).

Notably, the United States and China are negotiating a trade deal that’s expected to lower the massive surplus currently in China’s favor. Along with the trade deficit, the United States is seeking several concessions on aspects like intellectual property rights and forced technology transfers.

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