After Trump’s Tariff Threat, Is a China Currency War Next?
Published On Nov 26, 2024, 5:15 AM
Beijing may respond to President-elect Trump's proposed tariffs on Chinese goods by allowing its currency, the renminbi, to devalue. This could make Chinese exports cheaper and help offset the impact of the tariffs. However, a weaker currency may undermine economic stability in China, causing a lack of confidence among consumers and businesses, possibly leading to capital flight and reduced domestic investment. Moreover, it could contradict recent efforts to stabilize the Chinese economy amid challenges in the housing market.