August 2019 Trade Bulletin

Highlights of This Month’s Edition
• Bilateral trade: U.S. goods deficit with China reached $87 billion in Q2 2019, down 8 percent year-on-year; U.S. Q1 2019 services trade surplus with China fell for the first time since 2006.
• Bilateral policy issues: President Trump announced new tariffs on Chinese goods effective September 1, citing China’s failure to make large purchases of U.S. agricultural goods and curb the flow of fentanyl to the United States; the WTO issued a mixed ruling on China’s challenge of U.S. calculation of tariffs on certain Chinese goods; the Trump Administration issued a memorandum calling out WTO standards on developing country status for China and others.
• Quarterly review of China’s economy: China’s gross domestic product (GDP) grew 6.2 percent in Q2 2019 as stimulus deployed earlier in the year wore off; escalating trade tensions also hurt industrial profits as export growth collapsed, prompting fears about employment stability.  
• Policy trends in China: In an approach different from the recent takeover of Baoshang Bank, China’s financial regulators assisted the struggling Bank of Jinzhou by facilitating investment from three state-run investment firms; trading began on China’s new technology trading platform, but performance has been uneven.