Trump says China is 'killing us with unfair trade deals'

Jeannie Matthews
August 10, 2019

On Monday, China allowed the yuan to depreciate past the 7 yuan-per-dollar level for the first time in more than a decade, triggering worries of a global currency war.

USA businesses and consumers paid $6 billion in tariffs in June, a 74 percent rise from the same period a year ago, a coalition of US trade groups said Wednesday, warning a new round of tariffs would exacerbate job losses and dent demand.

China's exporters and their US customers have been whipsawed in recent months by trade uncertainties, with the fallout rippling through global suppliers from Germany to Singapore.

A truce was reached in July in the year-long trade war but was shattered last Friday when Trump vowed to slap a 10% tariff on $300bn of Chinese imports from 1 September.

That left China with a trade surplus of US$45.06 billion last month, compared with a US$50.98 billion surplus in June. In response, China on Monday said it would stop purchasing USA agricultural products. The onshore-traded yuan had dropped 1.33 per cent to 7.0352 per dollar at close.

But it does not look to be out of the woods yet, with shrinking imports pointing to weak demand at home.

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Both the onshore and offshore yuan breached the 7.0 level against the U.S. dollar on Monday, which investors see as a key threshold in the Chinese currency's value, but foreign exchange trading yesterday was calmer, with the onshore yuan weakening 0.08 percent to 7.0512, and the offshore currency strengthening 0.24 percent to 7.0802. Rick Adamski, who represents Door and Kewaunee Counties in the Wisconsin Farmers Union, believes the latest blow is politically motivated since well over 70 percent of farmers said they supported President Donald Trump in a recent Farm Pulse Survey.

Trump told reporters at the White House that the market reaction had been anticipated, but he remained confident in the strength of the US economy. The United States recently warned Hanoi that some export goods labelled "Made in Vietnam" were of Chinese origin. -China trade and market disputes amid growing anxiety about a downturn in the world economy. Hours later, Washington branded Beijing a "currency manipulator".

China's customs data showed the value of its soybean imports down 17.1 percent in the first seven months of the year. He also said China hasn't followed through on its commitment to stem the flow of the synthetic opioid fentanyl into the United States.

"This trade spat is going away no time soon, but we should see central bank easing bets rise globally and that will help limit some of the market carnage over the next couple weeks", said Edward Moya, senior market analyst at OANDA.

Pressured by weak demand at home and overseas, China's economic growth cooled to a near 30-year low of 6.2 per cent in the second quarter. That leads other nations to hold the reserve currency to purchase such goods and to maintain a steady exchange rate.

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