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Why China’s Trade Surplus With the U.S. Is Higher Than Ever, Despite Tariffs

President Donald Trump’s trade war with China was supposed to narrow the gap between how much the U.S. imports and exports from the Asian nation — but so far, it’s just getting wider.

China’s exports to the States surged in September, the country’s customs agency reported on Friday, contributing to a record trade surplus of $34.1 billion, a 13 percent increase over the same time last year. August’s surplus was also record-setting at $31 billion, bringing the year’s total to $225.8 billion — a sizable jump from the $196 billion reported between January and September 2017.

These numbers are particularly surprising given that Trump made good on threats to impose tariffs on $50 billion in Chinese goods over the summer and added 10 percent tariffs on another $200 billion in goods last month.

While economists say the surge may have been bolstered by suppliers rushing to get orders out the door before extra taxes kicked in, the latest figures dispute the administration’s arguments that escalating tariffs would produce quick results in America’s favor. With the Chinese yuan relatively weak against the dollar and U.S. consumers still buying Chinese goods in droves, the defensive measures haven’t had their intended effect. Instead, China has responded with retaliatory tariffs of its own, along with reported bureaucratic delays and customs holdups at ports.

The U.S. has shown no signs of backing down either, despite widespread criticism from the many American industries that rely on business with China. Rather, Trump has repeatedly called tariffs “the greatest” and doubled down on his position that America has long been “taken advantage of,” threatening additional tariffs on all $505 billion worth of Chinese goods the U.S. imports annually.

What remains to be seen is how resilient China’s export economy will remain in the face of higher taxes — and whether even the trade war can stem U.S. consumer demand for relatively cheap Chinese goods.

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