FIRST AIRED: July 13, 2018

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00:00:02
>> China's reported a surprising figure this month, a record trade surplus with the US, as a trade war between the two heats up. China's June surplus with America hit nearly $29 billion, that's an all time high. There's signs exporters were rushing out shipments before tariffs went into effect the first week of July.
00:00:20
On Tuesday, the Trump White House raised the stakes further threatening to slap 10% tariffs on an extra $200 billion of Chinese imports. President Donald Trump has demanded China cut its surplus, and as Reuters Elias Glenn reports, he could use the record numbers as grounds to pile on more pressure.
00:00:37
>> So the record surplus in June definitely doesn't help the situation between the US and China. As it reinforces the fact that the trend in the trade balance is not going in the direction that US President Trump would like. But with these one off reasons passed and with tariffs now in effect, those surplus is unlikely to continue to set records going forward and could even decline.
00:00:59
>> While this concern it could make tensions worse with the US, this may be good news for many Chinese businesses.>> There were indications that the spike in the surplus with the US in June were driven at least in part by Chinese exporters rushing to complete orders before the tariffs kicked in.
00:01:15
China's Ministry of Commerce has itself admitted that Chinese exporters were doing this. But the longer term trend over the last year has been towards a larger surplus with the US. So it's not only a one off phenomenon and part of the reason for this larger surplus is that the US economy has been quite strong which has driven an increase in demand for imports.
00:01:36
>> Meanwhile, other countries in the region were starting to show concern about the trade conflict. On Thursday, South Korea warned that components and materials used in home appliances, computers, and mobile phones could be caught in the crossfire between China and the US.