Posted on 06/09/2019 3:50:06 AM PDT by cba123
US Treasury Secretary Steven Mnuchin on Saturday accused China of allowing the value of its currency to slide in a bid to offset the impact of Washington’s trade tariffs on the cost of its goods to American consumers.
“It’s not coincidental in my mind that the currency has moved from approximately 6.30 [yuan to the US dollar] to 6.90,” the official said on the sidelines of the G20 finance leaders’ meeting in Japan.
(Please see link for full article)
(Excerpt) Read more at google.com ...
Not surprising, but disappointing.
That hurts them in other ways. Win/win for the US. Tarrifs are subsidized by China and investment money flees.
This would make the Chinese exports cheaper to address the tariff impact while still providing revenue to Chinese producers. To me this screams that the tariffs are hurting China. Let me know if I’m looking at this incorrectly.
Depreciation of the yuan also make imports into China more expensive. For some products, this diminishes the utility of yuan depreciation toward preserving exports.
The question becomes does a 10% devaluation mitgate a 25% tarffiff increase?
How does the devaluation effect manufaturers from say Germany operating factories in China? How does the devaluation effect purchaing power of the Chinese worker?
You got it right. They devalue the currency so the tarrifs have no impact on US consumers. The devaluation, however hurts them in other areas, such as foreign investment.
It would also make it easier for Americans to purchase Chinese property and companies. Oh wait, that’s illegal!
I think the Chinese are willing to have short term pain to protect their industries for a long term win.
Xi is commiting his reserves. He either thinks he’s winning or he’s attempting to stave off defeat a little bit further.
You buy Chinese because it cheap. It is also poor quality, it breaks and because we’re cheap we buy it again. This kills quality products that last. Repeat buying costs you more over a more over a life time. Buy quality!
Doesn’t it also have an inflationary impact on internal spending? So cost of living for the local population will go up.
That could be dangerous for those in charge...
Surprise surprise,surprise!
The Chinese government is absorbing most of the tariff. Remember, not all Chines imports are subject to tariffs. You can bet China is forcing Chinese manufacturers to eat part of the tariffs.
It also means China is going to have to pay more for imports from every other country, too. That benefits all the other countries because prices the Chinese have to pay is tied either to that countries currency or the U.S. dollar.
China cannot simply stop importing any of the products they must import.
IOW, another win for Trump. I’m still not tired.
“You can bet China is forcing Chinese manufacturers to eat part of the tariffs.”
In some cases the manufacturing is OWNED by the ChiCom government.
They may not even last until the election, where they’ll also have the expense of supporting the Dem.
You are going to like the next article down the page from the one you linked as well.
“Donald Trump ‘probably planning’ for tariffs on all Chinese goods after G20.”
That would assumedly be the 25 per cent tariffs on all the remaining Chinese imports ($300 to $325 billion’s worth).
G20 is 28-29 June, so the really big load of tariffs could well be announced by the 4th of July. 25% is a lot to adjust to by depreciating the currency (Yuan would go to almost 8 to the dollar) - that could trigger a formal declaration as a currency manipulator (they clearly are).
I know, we will see whether the Chinese continue to act like Donald Trump is yet another in a long, long, long line of self-interested clowns, like we ordinarily elect.
Trump is something special.
Do the Chinese recognize that yet?
We will see. Continue to make us proud, Mr. President.
Thank you.
For real.
Dog bites man.
The trade deficit is 90% a function of currency rates so this explains why the defect is likely to get worse.
This isn’t news to anyone paying attention.
Yep. Lower purchasing power.
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