China Relations: US Will Retaliate If China Further Devalues Yuan

China Relations: US Will Retaliate If China Further Devalues Yuan

China Relations: US Will Retaliate If China Further Devalues Yuan

A weaker yuan can help neutralize USA tariffs on Chinese goods by making them more price competitive on worldwide markets.

A second Shanghai-based trader said trade talks that were scheduled for September in Washington, prior to the latest USA tariff threat, now seem unlikely, adding further pressure on the Chinese currency.

U.S. Dollar and Japan Yen notes are seen in this picture illustration June 2, 2017. This news will bring a smile on the faces of investors in the U.S. market but still nothing is stable so far.

"We're not ready to make a deal but we'll see what happens", Mr Trump said. China's latest move came in retaliation to Trump's announcement that he would implement more taxes on Chinese imports to the US. The next round of talks is scheduled for September in Washington.

His comments sent United States stocks sharply lower, losing as much as 250 points, undercutting a recent recovery from the continued concerns the trade war will cause a slowdown in the global economy.

The U.S. this week accused China of devaluing the yuan and labelled Beijing a currency manipulator, as the trade war between the world's two largest economies continued to show signs of deepening.

Since the trade war begun a year ago, American taxpayers have had to pay over $27 billion in extra import tariffs - and is only expected to increase as the 10 percent tariffs on the rest of the $300 billion worth of Chinese products starting September 1.

China's yuan inched down against the dollar on Friday as nervous traders awaited Beijing and Washington's next moves in their bruising tariff dispute, but markets were generally calmer after a sharp slide early in the week sparked fears of a global currency war.

The Chinese central bank said the yuan's decline has been driven by market forces.

But an International Monetary Fund (IMF) official said Friday that allowing the currency to adjust freely to economic factors is one of its recommendations to Beijing. The Reserve Bank of India and the Bank of Thailand also cut rates.

The Chinese central bank governor, Yi Gang, tried to reassure markets, promising in a statement late Monday "not to use exchange rates for competitive purposes".

The yuan on Friday was trading 0.1% lower at 7.05 a dollar.

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