The US trade deficit narrowed in March for the first time in seven months as exports reached the highest level on record. The drop in the trade gap could point to higher growth in the first quarter than previously expected.

Container trucks drive past the container area at the Yangshan Deep Water Port, part of the newly announced Shanghai Free Trade Zone, south of Shanghai. September 26, 2013.
Container trucks drive past the container area at the Yangshan Deep Water Port, part of the newly announced Shanghai Free Trade Zone, south of Shanghai. September 26, 2013. (Reuters)

China's exports rebounded in April and its politically sensitive monthly trade surplus with the United States grew for the first time in five months as Beijing and Washington haggled over the chronic imbalance.

US officials visited Beijing last week for talks on cooling rising tensions between the world's two largest economies over trade and technology issues. Those meetings appeared to make scant progress, but further discussions are scheduled to resume next week.

China's Foreign Ministry said that a planned visit by President Xi Jinping's top economic adviser, Liu He, to Washington next week shows the US hopes to "reach a consensus" with Beijing on trade and economic issues.

"It is a positive signal," ministry spokesman Geng Shuang told reporters.

White House press secretary Sarah Huckabee Sanders announced the plan for continued talks on Monday.

"We are working on something that we think will be great for everybody," she told reporters.

The data released by China on Tuesday showed its trade surplus with the US totaled $80.4 billion in January-April, up from $50 billion in the same period last year. President Donald Trump's demands that China slash its surplus with the US have become a cornerstone of his combative economic policy.

In April, the trade surplus with the US swelled to $22.2 billion, up from $15.4 in March and the first increase since November, as exports to the US grew at a double-digit pace.

China's total exports jumped 21.5 percent in April from the same month the year before, bouncing back from a contraction the previous month thanks to resurgent global demand.

Imports expanded 12.9 percent year-on-year in dollar terms, leaving the country's global trade surplus for the month at $28.8 billion, a turnaround from a $5 billion deficit the month before.

Pork imports impasse

China has ramped up inspections of pork shipped from the US, importers and industry sources said, the latest American product to be hit by a potentially costly slowdown at Chinese ports in the past couple of weeks.

Most of the imported pork is frozen and not at risk of perishing. But the move comes on top of the additional 25 percent duties Beijing slapped on American pork and a slew of other goods last month, in retaliation for US tariffs on steel and aluminium imports.

The United States is one of China's top overseas pork suppliers, shipping $489 million worth of the meat last year.

Some trade experts said they believe Beijing is sending a defiant warning to Washington in response to sweeping US trade demands made on China last week.

Hard-line demands

Among the list of hard-line demands that Trump's delegation handed China last week was an ultimatum to cut $200 billion from its annual trade surplus with the US by 2020. Last year's merchandise trade surplus totaled $375 billion, according to US data, while Chinese statistics put it at about $276 billion.

The widening surplus "reflects the difficulty of closing the trade gap between the two countries in the near term, but it is unlikely to obstruct the constructive progress made recently" in negotiations between Washington and Beijing, ANZ Bank's senior China economist, Betty Wang, said in a research note. The high-level meetings are "constructive moves in the right direction" to resolve the tensions, she said.

After last week's meeting, China's Commerce Ministry said the two sides had agreed to establish a mechanism to try to resolve their dispute, though differences remained.

Trump has threatened to hike tariffs on $150 billion in Chinese imports. China's communist leaders have countered by outlining $50 billion in US goods that they would target with retaliatory duties on goods including aircraft and soybeans.

Source: AP