China posted its first trade deficit in more than a year in March as exports declined unexpectedly as the Lunar New Year holidays disrupted activity, data from the General Administration of Customs showed Friday.
Exports decreased 2.7 percent year-on-year in March, reversing a 44.1 percent surge posted in February. Shipments were expected to grow 11.9 percent.
Meanwhile, imports climbed 14.4 percent annually, bigger than the 12 percent increase economists had forecast.
Consequently, the trade balance showed a deficit of $4.98 billion in March. This was the first deficit since February 2017. Economists had forecast a surplus of $27.5 billion.
In yuan terms, exports decreased 9.8 percent, while imports gained 5.9 percent in March.
The biggest risk going forward is clearly that the current trade tensions escalate to the point where meaningful tariff barriers are erected, Julian Evans-Pritchard, an economist at Capital Economics, said.
But even if this is avoided, trade looks likely to soften slightly over the coming quarters given that global growth now appears past its peak and China’s own economy faces rising headwinds from tighter policy, the economist noted.
Earlier, US President Donald Trump imposed 25 percent tariff on imported steel and 10 percent on imported aluminum.
China retaliated by announcing tariffs on more than 100 US goods including aircrafts, soya beans and chemical products.