mandag 5. august 2019

Trump accuses China of 'currency manipulation' as trade war escalates

President Donald Trump on Monday accused China of "currency manipulation," shortly after Beijing struck back with its own retaliatory action as the trade war continues to escalate. Responding to Trump's threat on Thursday to levy a 10% tariff on $300 billion of Chinese goods, China allowed its yuan to fall to its weakest level in more than a decade and asked state-owned enterprises to suspend imports of US agricultural products. 

Stocks opened sharply in the red with the Dow falling 500 points as investors saw no end in sight to the long-standing trade war. The move prompted Trump to call out China over "currency manipulation," while nudging the Federal Reserve that the yuan's low level is a "major violation." It's the responsibility of the Treasury Department to label US trading partners for meddling with their currency, which the Trump administration has stopped short of doing so far. But it appears that Trump is hoping the yuan's depreciation will push the Fed to cut rates even lower.