China’s exports experienced a more than expected surge in July despite fresh US duties, and its closely watched surplus with the US also remained near record highs – as Washington finalised on its new tariff list during the bitter dispute that some fear can derail global growth.

Washington is set to begin collecting 25% tariffs on another $16 bn in Chinese goods on August 23 – in the latest move by President Donald Trump to put pressure on Beijin to negotiate trade concessions. Both countries have already slapped tit-for-tat duties on $34 bn of each other’s goods.

China has warned that it will strike back, repeatedly – and has already begun preparations for enforcing its own retalioatory tariffs, stating that the United States’ protectionism will act as a threat to the global free trade order. China’s headline numbers are the first readings of the overall trade picture, for the world’s second- largest economy aince US duties on $34 bn of Chinese imports came into effect on July 6.

After a strong start to the year, growth in the world’s second-largest economy cooled slightly in the second quarter, partly hit by the government’s years-long efforts to tackle debt risks.The government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more “active” fiscal policy.

“Looking ahead, we expect export growth to cool in the coming months, though this will primarily reflect softer global growth rather than US tariffs, the direct impact of which will continue to be mostly offset by the renminbi’s (yuan’s) recent depreciation,” Capital Economics’ Senior China Economist Julian Evans-Pritchard wrote in a note.

The country’s surplus with the United States shrank marginally to $28.09 bn last month from a record $28.97 bn in June.

Washington has long criticised China’s trade surplus with the United States and has demanded Beijing cut it. Global financial markets have taken a beating in recent months, among  fears  that Trump’s “America First” policies could derail a global economic revival.

Chinese state media, reflecting the government’s stance, has said China will not be cowed in the face of US threats – and will propose its own tariffs if Washington goes ahead with all of them.