VINACHEM

The tit-for-tat tariffs imposed by the U.S. and China drastically undercut trade between the two countries in January, resulting in the largest drop-off in Chinese imports of American goods in recorded history.

Last month's Chinese imports of U.S. goods plunged 41% on the year to $9.2 billion, statistics released Thursday show, marking the biggest year-on-year decrease since comparable data started being kept in January 1994. This follows December's 36% import dive.

China exported $36.5 billion worth of goods to the U.S. in January, down 2% from a year earlier. Mobile phones, a Chinese export staple, appear to have suffered the brunt of the impact.

Both imports and exports fell short of year-earlier figures for two consecutive months. Companies had rushed to export products ahead of anticipated tariff hikes until fall of last year, but such moves receded in December and January. There will likely be a boomerang effect this year, weighing on exports to the U.S.

For imports, soybeans are apparently responsible for much of the downslide. Winter is usually peak season for soybean imports, following the fall harvest in the U.S., but imports of the crop continue to slump in the face of Beijing's retaliatory tariffs.

China promised to purchase 5 million extra tons of soybeans during top-level discussions with U.S. trade negotiators in late January, but any impact from that pledge will likely be seen between this month and the next.

These dynamics caused China's trade surplus with the U.S. to jump 25% in January to $27.2 billion. U.S. President Donald Trump has constantly lambasted the trade disparity, and this new data point will likely come up in bilateral trade talks ongoing in Beijing.

China's tariff war with the U.S. has cast a shadow on overall trade. At first glance, the numbers seem healthy: exports recovered to a 9% gain in January, beating analyst projections. China Central Television reported that figure as the top news during the noon hour and Li Kuiwen, spokesman for China's General Administration of Customs, described the stat as a "good omen" during an interview with the state-run broadcaster.

But the surge in overall exports cannot be taken at face value. Chinese enterprises tend to front-load exports before the lengthy Lunar New Year holiday, which this year is taking place during the first half of February, then amplify imports afterward.

Last year, the Lunar New Year celebrations occurred during the latter half of February. Overseas shipments were concentrated during the first part of that month, and monthly exports surged 44% on the year. It is more likely than not that the same phenomenon emerged last month.

A closer look at January's data further reveals the weakness of Chinese exports. Shipments of mobile phones tumbled 19% -- a further indication of the iPhone's woes. Exports of personal computers rose 10% in value, but shrank 4% in terms of units.

Overall imports in January dipped 2% on the year. Integrated circuit products, the top import, undershot year-earlier numbers in both value and volume, suggesting a broad stagnation of the Chinese manufacturing industry, especially with the electronics sector.

If imports similarly languish this month, despite the expected post-Lunar New Year uptick, it would give further credence to the brittleness of China's internal demand. - NIKKEI -