CFR senior fellow. Views are my own. Retweets are not endorsements. Writes on sovereign debt and capital flows.
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Imports from China continue to be on an strong upward trend (Chinese industrial policies, China's undervalued CNY .. ). They are now running around EUR 40b a month/ EUR 500b a year. The EV case didn't have a macro impact
Looks like there were net sales of LT Treasuries tho, led by official investors ... so a bifurcated report
This potentially matters quite a lot, as the primary impact of the tariffs on China to date have been a reallocation of the point of final assembly inside Asia -- so rising imports from the ASEAN countries and the NIEs (Korea, Taiwan)
Higher US tariffs are having an impact on bilateral trade (the US and Chinese data agree on the trend tho not the level of trade) ...
. @sobel_mark has a good piece today for OMFIF making the case that an appreciation of the yuan is a necessary component of any global effort to bring China's surplus down. I of course agree
The deficit in pharmaceuticals is now big ($200b, ~ 1/6th the total deficit ...) and 1/2 of that is with Ireland alone ... (hence the bigger bilateral deficit with Ireland than with Germany this year)
So the goods deficit is still running ahead of its 2024 pace, even without all the pharma craziness ...
The "deals" struck by the deal maker in chief haven't been entirely, well, coherent -- raising tariffs on SE Asia to ~ 20 and some tariffs on Mexico to 25% helped China out, as it reduced the edge of alternative suppliers
The issue, as some already know, is that China changed how it calculates its goods surplus in the middle of the pandemic, moving away from the (reliable, and verifiable from counterparty data) customs data to an "internal" survey ...
There are a lot of reasons for the gap between the goods balance and the current account balance. Japan has a huge investment income surplus (why doesn't China tho?) and so on. But the gap here is enormously important ...
Based on the newly reported data for the monthly surplus on a BoP basis, that is what happened in q2. 
This excellent FT story provides the narrative to go along with the hard data -- China's localities have tremendous incentives to subsidize the production of overcapacity in new and old sectors alike. & with internal demand weak, exports result 
The big swing in the data came from consumer goods (which includes pharma) and is partial payback for a super strong q1 ...
That disturbance -- which I felt, and so did Logan Wright and Adam Wolfe -- came as China used a new internal data set (then undisclosed) to adjust its exports down and move its imports up (relative to its previous methodology, note the fit v the old data before 2020)
