As I keep mentioning China has the upper hand. If the markets continue to be pressured by these tariffs and fall 5-12-18% you are going to see these tariffs lifted immediately. What's he going to say, China has to buy our agriculture and they can't devalue the Yuan....
China has the advantage of being a top-down communist system where they can oppress individuals and shut them up. US will have to address the bottom-up pains caused. Mainland Chinese are brainwashed, making China as a country powerful. Screw the communist crap
China’s yuan just weakened to an important level. One analyst says it’s ‘retaliation’ for tariffs PUBLISHED 4 HOURS AGO The sharp weakening in the Chinese currency came after U.S. President Donald Trump unexpectedly announced fresh tariffs on Beijing last week that are set to take effect on Sept. 1. “I think this is clearly a retaliation that in the past China has refrained from doing,” Claudio Piron of Bank of America Merrill Lynch Global Research told CNBC on Monday. https://www.cnbc.com/2019/08/05/chi...t-the-dollar-amid-us-china-trade-turmoil.html
China, which has historically controlled its currency, the yuan. allowed it to fall to its lowest level against the dollar in more than a decade. The onshore yuan broke above 7 per U.S. dollar and traded at 7.04. “It appears to have decided that, given the increasingly dim prospects of a trade deal with the US, the boost to China’s export sector from currency depreciation is worth attracting the ire of the Trump,” Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note. “The fact that they have now stopped defending 7.00 against the dollar suggests that they have all but abandoned hopes for a trade deal with the US.”
W And why it is called retaliation? What are the losses that US bears from this move? Losing the goods trade battle? China exports takes small share in US GDP, at the same time devalued Yuan will help to contain US inflation from tariffs and maintain imports.
https://markets.businessinsider.com...tection-spikes-on-trade-war-2019-8-1028418219 The cost to insure investment in Chinese debt saw its biggest single-day in more than six years on Monday. Five-year credit-default swaps on China sovereign debt exposure jumped as much as nine basis points, reaching more than 55 basis points. That marked the biggest intraday increase since June 2013, according to Bloomberg data. The move came after China let its currency, the yuan, slide to its lowest value against the US dollar in a over a decade. President Trump tweeted that China is manipulating its currency. June 2013 was when PBOC thought they could let the interbank market work itself and it had a massive liquidity crisis within weeks, had to intervene and infuse loads of cash https://en.wikipedia.org/wiki/Chinese_Banking_Liquidity_Crisis_of_2013