A trade war between two world’s biggest economies has got to a new level. The sides stooped to heated exchange of ambitious statements, explicit threats and real actions such as imposing tariffs. Outside observers say that the United States took the lead in this battle despite the fact that it has to cope with several opponents at a time.
Besides China, the United States is in disagreement with its neighbors, Mexico and Canada, and the European countries. But even that state of things does not enable China to cause any serious damage to the American economy. Besides, Trump has a secret weapon – the Tweet button. Every message on his Twitter account produces a significant impact upon the global financial markets. Just recently, one Trump’s tweet contributed to a plunge in the ruble’s exchange rate, and now the yuan is facing downside risks. The US President accuses China of deliberate devaluation of the national currency aimed at providing support to exporters that suffer losses due to the trade conflict. However, his accusations are partially objective, as the Chinese national currency actually depreciated by 15% year to date.
Trump does not like such currency manipulations, so they can become a good reason for another attack on China that preferred to take the defensive stance. Other countries can only passively watch this battle of two superpowers and wait for the outcome.
