Posted on 08/05/2019 9:35:04 AM PDT by NRx
The trade war between the United States and China ratcheted up over the weekend to a level that Cowen says, “on a scale of 1-10, it’s an 11.”
“Overnight, Chinese government retaliated against new U.S. tariffs, and it’s designed to get the President’s attention,” Cowen analyst Chris Krueger said in a note to investors on Monday.
China responded on Monday in two ways to President Donald Trump announcing the U.S. will add 10% tariffs to $300 billion worth of Chinese goods.
First, China’s central bank allowed its currency the yuan to fall “below 7 to the dollar, which is a psychologically significant threshold,” Krueger said.
The People’s Bank of China, the country’s central bank, denied that it is intentionally devaluing its currency to counter tariffs. The bank claimed the drop was “driven and determined by the market.” But China has historically controlled its currency and, on Monday, the yuan dropped to its lowest level against the dollar since 2008.
“While the currency had been weakening recently, the sharp move ... clearly signaled a change in policy and will be interpreted as a signal the Chinese are not seeking a near-term deal,” Krueger said.
(Excerpt) Read more at cnbc.com ...
Add another 10% tariff.
Peg the tariff to the value of the yuan, problem solved.
Guess the Chinese don’t have a very strong hand to play, after all.
Increase the tariffs to make up the difference.........
GMTA!.........
Works for me.
At that point I believe Yuan has fallen naturally. It is how the currency reacts to the events happening and news flow.
What will happen here is with the regular Chinese business guy...is that he’ll go and take whatever he has....converting it into gold, and dispose of Chinese currency as quickly as possible. You see the same thing in Iran, where they convert currency in Dubai currency, or gold.
But...but...they’re our FRIENDS. Our BUDDIES.
Equal partners in Global Trade and Mutual Coexistence.
That’s what the UniParty told me.
they fact they can, and did, devalue the currency the next business day after Trump’s announcement pretty much proves the point Chinese Government centrally-manages the whole currency and trade process
CNBC is such a hoot.
If this had taken place under Obama they’d be praising his business acumen.
It happens under Trump and it’s the end of the world.
China is a big oil importer, correct? What impact will this have on their economy?
At this point I believe in unicorns, and I have a better chance that my belief is true and yours is a fantasy.
The chinks NEVER let their currency float with the real market, they use it as a tool, and are very effective at it.
The USA is saddled with the FED, a construct that should never have happened, why would any government allow it's currency to be controlled and priced by an outside group of bankers?
All those free-traders out there should be thrilled with Red China subsidizing our imports!
Doesn’t make any sense - the yuan is near the high (7.05) for the past 5 years.
China aims at Trump, shoots own foot.
Create an automatic adjustment to the tariff based on the exchange rate.
I am trading a little bit and shorting Yuan was a natural instinct. You are somehow exaggerating governments’ abilities to manipulate markets. Note, I am not saying China doesn’t it at all.
Stop all trade with China, all trade with those that trade with China, and tell China to eat the loans they made to us.
Maybe the Chinese dont think Trump will be reelected and they can wait him out then get a democrat puppet they can control
Gee who could be telling them that
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