China says 'bully' United States started a trade war

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Pressed on the possible negative impact of multiple trade disputes on the USA economy, Mnuchin said the Trump administration was keeping a watchful eye.

This week, Washington threatened to impose 10% tariffs on another $200bn of Chinese imports.

Gold slipped to seven-month lows and Treasury prices rose after the Federal Reserve reinforced views of strong USA economic growth in a report to Congress, reinforcing expectations of higher interest rates.

Last week, the United States and China introduced tariffs of 25 percent on $34 billion of each other's exports.

Imports grew 14.1% in June from a year ago, well below the 26% increase in May and economists' forecast of a 23.5% gain.

President Donald Trump said the United States was in a nasty trade battle with China, but things would ultimately work out.

Analysts expect shipments growth to slow in the second half of the year, putting more strain on an economy already feeling the pinch from a multi-year debt battle that has driven up corporate borrowing costs.

Companies worry the spiralling dispute might dampen global trade and economic growth.

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However, a lower yuan would make it more expensive for China to import U.S. goods.

China imported American goods worth $13.6 billion in June while exporting $42.6 billion to the United States.

"There will be challenges facing foreign trade with rising instabilities and uncertainties in the global environment, " said a Chinese customs agency report.

China's exports to the United States rose 13.6 percent in the first half of 2018 from a year earlier, while its imports from the USA rose 11.8 percent in the same period.

In a sign Beijing is seeking alternative supplies of the commodities as it hit U.S. imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries. Speaking after a regular two-yearly review of China's trade policies at the World Trade Organization (WTO), Wang was sceptical. The trade surplus was 261.88 billion yuan last month, official data showed.

The benchmark S&P 500 index hit a more than five-month high on Friday on gains in industrial stocks and energy companies, while the safe-haven US dollar flattened after touching a two-week high.

China logged a trade surplus of $41.61 billion for the month, compared with forecasts for a $27.61 billion surplus in June and a surplus of $24.92 billion in May.