From trade to currency war: US-China spat getting uglier on markets

Money-pulating: Stacks of 100-yuan notes at a bank in Nantong in China’s eastern Jiangsu province.China has rejected accusations by Trump that it was manipulating the yuan to give its exporters an edge, saying Washington appeared “bent on provoking a trade war”. — AFP

THE current trade spat between the United States and China first started with President Donald Trump’s domestic agenda of “protecting the national security” and to punish the nations, which are enjoying massive trade surpluses with the US, which, we all know to be China and to a lesser extent, the Asian-based and other emerging markets exporting nations.

To be exact, Trump made his first move towards “protectionism” on Jan 23 this year with the imposition of 30% and 20% import tariffs on solar panels and washing machines respectively. Although, not specifically targeting at China, it was no surprise that China, being the world leader in solar panel manufacture and exporter of washing machines worth some US$425mil a year, had condemned the actions, deeming it as aggravating to the global trade environment.