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Trade war

US exports to China sink 11% as soybean shipments plunge

Trade deficit on pace to reach record high

A soybean farmer in the U.S. state of Illinois checks his crop in a field. U.S. soybean shipments to China decreased sharply in August amid trade tensions.   © Reuters

WASHINGTON -- U.S. exports to China decreased 11.3% on the month in August, as soybean shipments plummeted amid the escalating trade tensions between the world's two largest economies.

Total American exports to China amounted to $9.77 billion, the Department of Commerce said Friday, widening the monthly decline from 8.2% in July. U.S. imports from China slid 2.1% in August as the tariff war took a toll.

The U.S. trade deficit with China widened by 0.8% on the month to $34.42 billion. The cumulative figure from January increased 9.1% on the year to $267.9 billion -- is on pace to surpass the full-year deficit for 2017 and reach a new high -- contrary to the Donald Trump administration's goal of reducing the deficit.

 America's overall trade deficit with all partners expanded 4.7% in August to $75.45 billion, the highest level in six months, as exports slumped 1.3% to $138.42 billion and imports grew 0.8% to $213.87 billion on the back of strong domestic demand. Retaliatory levies imposed by the European Union, Canada and Mexico on U.S. goods in response to the U.S. tariff on steel and aluminum proved damaging.

Soybean exports dropped most sharply, by 28.2% to $2.58 billion. The shipments surged in May and June before China's retaliatory tariffs on U.S. soybeans took effect, but declined from July. Automobile exports, also hit by China's tit-for-tat levies, were lackluster.

The Trump administration put in force additional tariffs of 25% on $50 billion of Chinese goods twice: first on July 6 and again on Aug. 23, prompting China to respond with similar scales of duties at the same time.

The U.S. in July announced additional tariffs on $200 billion of Chinese goods, putting them to effect on Sept. 24.

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