BEIJING – The trade war between the US and China has spread to the monetary field. In addition to devaluing its currency, the Chinese government tries to reduce US imports.
The trade war between the two economic giants has reached a new stage. After the US declared tax on Chinese products, Beijing decided to give change by devaluing its currency. The exchange rate between the currencies of the two countries reached 7 yuan for 1 dollar on Monday.
To make matters worse, the government has asked state-owned companies not to buy US agricultural products. The action was not without reaction. Following the latest chapter of the trade war, President Trump accused Beijing of “monetary manipulation” in a social media rant.
China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!
— Donald J. Trump (@realDonaldTrump) August 5, 2019
“China dropped its price to its almost an historic low. It’s called “currency manipulation.” Are you listening to the Federal Reserve? This is a major violation which will greatly weaken China over time!” he said on Twitter.
The feud between the two countries, besides affecting the delicate relationship between them, has created uncertainties in the world economic scenario .
“It’s among the worst-case scenarios,” said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. “First markets sell off, then Trump wakes up and this all gets far, far worse.”
China and the US have been waging a trade war. Amid tensions, China said it would take action if Washington overcharged its $300 billion products from September 1.
Meanwhile, Trump announced that it would impose an additional 10% tariff from September 1 on the remaining $300 billion in imported goods, although both countries are continuing their trade negotiations.