Experts warn of the possibility of the beginning of a currency war between Washington and Beijing against the backdrop of a trade dispute between the US and the PRC.
The rate of China’s national currency on Monday at certain moments of trading hit the lowest point in 13 months on Asian exchanges against the US dollar. For the first time since June 2017, the US dollar was traded for 6.8400 yuan, which lost almost 0.4 percent of its value. The Chinese currency has lost more than seven percent against the dollar since April.
Against the backdrop of the escalation of the trade conflict between the US and China, experts caution against the outbreak of a currency war between Washington and Beijing. According to President Donald Trump, Beijing intentionally devalues its currency in order to reduce the cost of exports on world markets and thus offset the consequences of Washington’s introduction of duties on the import of goods from China.
The head of the White House accuses China of machinations with yuan and interest rates. In an interview with CNBC on July 27, the US president stressed that the yuan has recently “dropped like a stone.”
Earlier, Trump wrote in his twitter: “China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge.”
Meanwhile, the White House threatens to slap higher tariffs for a number of Chinese products worth about $ 500 billion.
Against this background, seaports in the USA, in particular in California’s Los Angeles and Long Beach, are bracing for losses due to the weakening of freight deliveries and, as a consequence, job cuts.
Last year, seaports in Southern California earned 173 billion dollars on imports from China, about one-third of the total imports from China to the United States.