How The US-China Trade War Turned Into A Currency War

How The US-China Trade War Turned Into A Currency War


The trade war took a dangerous turn and
is now morphing into what many are calling a currency war. It’s all out economic warfare between
the two biggest economies in the world. U.S. and China. Two key developments took us here. The Chinese currency weakened passed
a significant level that investors were thinking maybe China would
defend—an indication perhaps that China was stepping up its fight
in the trade war. The U.S., in response, designated China a
currency manipulator, something that the U.S. Treasury hasn’t done since 1994. And while mostly symbolic, was seen as
a big aggressive move to call China out and just escalate this
trade tension even farther. What makes it difficult is that when
you have a currency war, everybody wants a weaker currency. Weaker currencies help your exports stay
more competitive on a world stage. But not everybody can
have a weaker currency. So in response to the U.S. and China’s moves on currencies, we
saw other central banks and economies take action like India, Thailand and
New Zealand, all surprising their markets through monetary policy and
all weakening their currencies. If everybody races to the bottom, it
can be very disruptive to markets and to the global economy. When the Treasury formally calls out
another country for being a currency manipulator. Not much happens. It’s largely symbolic. It’s a badge of dishonor. It’s considered embarrassing and puts that other
country at the top of the G-20 agenda for discussing what
it’s doing with its currency. In practice, not
much explicitly happens. The Treasury engages the International
Monetary Fund and China in negotiations and discussions about what
the currency has actually been doing and how they’re
going to fix it. However, this administration doesn’t necessarily
play by the same rulebook. So many are worried that by
designating China officially a currency manipulator, President Trump could use that
politically and on the world stage to just impose more tariffs,
other sanctions and other economic punishments. Now, that’s not necessarily in
the Treasury rulebook for how this goes. But we’ve seen President
Trump break the rules. Mostly everybody wants
a weaker currency. There are benefits to having
your currency be weak. Number one, it makes
your exports more competitive. If you’re Japan and selling Hondas and
Toyotas to Americans, it gives them an edge over companies
like GM and Ford. It also makes
earnings more competitive. S&P 500 earnings have gotten hit this
year because the dollar’s been so strong. Anybody that does business overseas, from
Apple to Procter and Gamble to the automakers to John Deere, which
President Trump also called out during a tweet, their earnings and their revenues
get cut by that strength of the dollar. They sell overseas. It’s less competitive. They bring the money back home. It’s worth less. We’ve learned this lesson
so many times. And that is currency wars and
tensions fueled by countries trying to weaken their currencies can have a
very destabilizing effect on growth and on stock markets. It happened in 2015. China made a surprise decision to let
its currency weak and devalue the yuan. Guess what? That led the S&P 500 into a
correction, 10 percent off the highs. That’s why as soon as we saw
China let its currency weakened, it sparked all sorts of concerns, not just about
the escalation of the trade fight, but about what’s really happening
beneath the surface in China. When countries devalue their currencies, it
leads investors to wonder, is their economy suffering
worse than expected? Are they going to have to deal
with capital flight, a scary prospect where people take money out
of their economy. We’re not talking about in a small
emerging market like Turkey, where we had these concerns. We’re talking about China, one of the
biggest markets in the world and the second biggest economy in the world. When you have other countries stepping in,
then to fight to protect their economies and their currencies, it’s this notion
of a race to the bottom on interest rates and on currencies. And that is what spooked markets. The fact that it’s going to be unpredictable,
it’s going to be a source of tension and ultimately it’s going to
kill growth because tensions put up walls between countries. Trade slows down. Tensions emerge. And that’s sort of been the theme of
what we’ve been seeing on trade and now currencies in 20 19.

100 Replies to “How The US-China Trade War Turned Into A Currency War

  1. China always been doing this, and other Asian countries as well. Since they have sound growth, it was obviously helpful.

  2. Americans should know that the Chinese Communist Party is the largest oligarchy in the world and that to bring back American unions and raise American wages, we will need to also empower Chinese working and middle class people.

    This will come against the wishes of the Chinese Communist Party that controls the Chinese economy, control wages in China, control their value of currency, and control the Chinese business environment for the purpose of empowering a Communist agenda in Asia.

    The Communist Party in China is also their 1%.

    An American president will need to challenge the Chinese Communist Party while empowering the working and middle class people of China. Tariffs won't do that but something needs to be done in making this happen. When wages of both nations reach parity only then will American labor rebound.

    Ideas, anyone???

  3. CHINA DID NOT DESTROY AMERICA…WHAT HAS DESTROYED AMERICAN IS UNNECESSARY ENDLESS WARS OF AGGRESSION ABROAD AND CORRUPTION IN WASHINGTON, DONALD TRUMP LIKE MANY OTHER LEADERS ARE SCAPEGOATING CHINA AND MIGRANTS TO APPEASE THE VULNERABLE WHITES THAT THEY HAVE DUPED FOR YEARS

  4. A currency war is what we need! if you dont agree its because you dont know whats good for you….. Crack addicts dont think they have a problem either.

  5. USA is led by dictator…and going down in couple of decades…wealth and power corrupt the people…karma is also coming….get ready for the consequences.

  6. You know that if the US had a weaker currency, then that means the the people at home can't purchase as much. That's bad!

  7. Trumps Unemployed Voters Care About:

    Alt Right Nationalism
    Freedom of Speech
    Boys Club
    Antifia
    Israel Rights not America
    Jesus Kanye West
    BLM

    Yet they don’t care about China & Ai Automation Taking Over

  8. China has no comparison to the United States. First of all in the United States you can own a business owned property and freely invest. China rent home from the government, never allowed to own property, cannot use bus cannot use airplane cannot have friends with low credit score. How is China anything like the United States????????

  9. Change the president of America . This suitation will resolved. This suitation never happened during' Obama' tenure .

  10. People already know long time ago, I can tell what US will do next: now, they are using hk card… next yr Taiwan which is China's core interest. Ask US not to play with fire.

  11. This video was made for toddlers, not to mention that it’s biased “we have seen Trump break the rules before”

  12. An inverted yield curve is caused by a loss of investment confidence, distorting the statistics. A loss of long- term investment confidence has the power to generate a recession; it can also create a bull-run in gold. Similarly, it creates preppers, who might collect together a pantry not dependent upon power; or people who withdraw their funds from banks, or people who build an underground shelter. Threats and counter- threats in political powers shows that financial instability begins as government policy. All these people are showing an educated response to try to protect themselves and their assets; and they are the BRIGHT ones. There are also some who have searched in God's word for the solution, and they FOUND it.
    The financial storm brewing in the EU results in the collapse of the Euro. Ezekiel 7: 19 Revelation 18: 17 Psalms 46: 4-6. We approach the time of worldwide 'wrath' Revelation 11: 18: "The nations became wrathful, and Your [God's] own wrath came; and the time came to…..bring to ruin those ruining the earth." Israel will declare: "Peace and security!" 1Thessalonians 5: 2, 3 and Iran will BOMB them; Daniel 11: 44, 45 due to their great anger when their nuclear assets were destroyed by pilots. This 'sudden destruction' has worldwide implications, and the US joins the war against Iran immediately. Daniel 8: 20, 23-25.

    My purpose is to inform as many people as possible how to survive the Great tribulation. Psalms 68: 11: "Jehovah Himself gives the saying: The women telling the good news are a large army." This begins with the truth found in God's word. John 17: 17. The survivors are already found in God's Kingdom at the outbreak of distress, when Christ arrives. Matthew 25: 31, 34. This is why they are protected and healed during the Great tribulation. Matthew 24: 14, 21, 22. They can therefore be described as survivors with confidence. Revelation 7: 9, 14- 17 The 'tribulation' found in Matthew 24: 29, 30 is also the arrival of Christ 'in power and great glory'. This is also the 'sudden destruction', when "Peace and security!" is declared in Israel, 1Thessalonians 5: 2, 3 as the False prophecy of the False prophet Revelation 19: 20; and Iran BOMBS them Daniel 11: 44, 45 introducing Jehovah's Day of anger with battle and distress appearing in Gaza, Ashdod, Ashkelon and Ekron Zephaniah 2: 1-11 while Christ told us to 'get out of Judea' at this time Mark 13: 16 because it is a time of missiles war. 2Peter 3: 10. During the 'hissing', 'roaring' missiles, Christ arrives in power earth-wide, because the political system has been thrown out of power by Jehovah. Satan, [Gog of Magog Rev 20: 1-10] came upon the 'soil of Israel', Ezekiel 38: 18, 19 and Jehovah responded by changing the worldwide government. That is why the survivors are found to be already in God's Kingdom when Christ arrives; as seen in Matthew 25: 31, 34.
    The Great tribulation has broken out; and along with the war between the US, allies and Iran there is also a war between Russia and the financially collapsed EU Ezekiel 7: 19-22. In addition, the original destruction of Iran's nuclear assets by pilots refuelling in Saudi Arabia sets all 23 Arab states into conflict and bloodshed having a Sunni-vs-Shea character. Jeremiah 25: 24-26, and this results in large scale arson in the oil and petrol refinery industry. Psalms 37: 20. So we see a time of financial meltdown Psalms 46: 4-6 is also a time of fuel destruction, that leaves transport and industry stranded.
    The Great tribulation is a five month crisis that is cut off by Jehovah when the wicked are all destroyed Psalms 92: 7 Psalms 37: 8-10. This five months conforms to the flood of Noah Matthew 24: 37 that is seen in Genesis 7: 24 as a 150 day event when the flood went over the tops of all mountains. This conforms to the five months of distress found in prophecy in Revelation 9: 5, 10.
    This planet is to be cleansed and redeveloped and re-established until it resembles a Paradise Luke 23: 43. Even the dead of former times are coming back, as actual accounts and prophecy shows. Acts 24: 15 Revelation 20: 13 Mark 5: 42.
    All this detailed history is written in advance to create FAITH based on information and understanding Romans 10: 13-15 because Jehovah is bringing in the biggest rescue of faithful mankind John 3: 16 ever in history; due to the worst man-made cataclysm in all human history. So the written prophecy 2Peter 1: 20, 21 is to greatly increase the numbers of those being saved.
    The time of man's rule over man is over Romans 9: 28 with these events; and the political system will be EXECUTED Revelation 19: 11, 19-21 for causing the deaths of billions, while breaking the system down into chaos.
    The time of Christ's Rule Revelation 11: 15, 18 Matthew 24: 29, 30 and also His heavenly brothers Revelation 5: 10 BEGINS earth-wide; and when the wicked are destroyed; Psalms 92: 7 the Great tribulation is OVER.
    There is now a 'new heavens', ruling over a 'new earth' Revelation 21: 1 and YOU ALSO CAN LIVE THROUGH THIS TIME AND THEN EXPERIENCE EVERLASTING LIFE IN PARADISE.John 17: 3, Luke 23: 43; John 3: 16 Psalms 37: 11, 29.

  13. The first loser in the currency war is the EU. The Euro collapses, and this causes a famine in the EU, and war appears between the EU and Russia. Ezekiel 7:19-22. This is the time when Christendom is pillaged for valuable artefacts to support the Russian rouble, at a time of worldwide financial meltdown Psalms 46: 4-6.

  14. You are innocent , American pretend shouting others manipulate devalue thier currency, Truly the American very favor US dollars high value. Because it's printing dollar in exchange others real tangible goods. While it keep on trying by every means in anyway to keep dollar the global currency. That's why US collude with UK in Brexit trying to destabilize or destroy EU money as it's challenge the dollar.

    BUT situation now US FED are printing huge amount of dollar inject into market via government hiding sovereign funds and big government behind conglomerates businesses. The dollar they keep on printing are HUGE much much more than BUSH & OBAMA printed out during "Too big Too fail" crisis. And we all real economists know well this is The worst doing on free market mechanical that all Economicss withhold.

  15. It’s Time to stop trade with China there will never be fair trade with China, China has been cheating for 30 years and they have no plan of changing.

  16. i dont give a DAMN about stocks and profits and alll that garbage that masss media always spew. it is all about values. morals and doing the RIGHT thing. MAGA 4 life!!!!

  17. The trade war is not morphing into a currency war. That assumes the trade war came first. Quite the opposite is true. Countries going off the gold standard in the 1930's triggered a currency war, which inevitably leads to trade wars.

  18. The last time I checked we owed China a Trillion Dollars… When Obama was in office along with other Presidents…..I'm confused. Can someone help me please, I don't like feeling lost….ughhh. The U.S. has tariffs on China (but we owe them). Now China is retaliating against us….SMH. Can someone please school me and point me in the right direction…This is BS…ugh

  19. americans are dumb people, they are also uneducated and it's very easy for US government or the deep state to control them, but now USA is in very bad situation, they have enormous debt, the US economy is going in recession, the people are divided,  they have clown-lunatic for president, so what US needs is to find some imaginary enemy to unite the people. Russia is already too well-known and it has weapons which can destroy USA so it's dangerous to play with it, and here it comes China, China is the new "enemy", it's the modern USSR, and as everyone can see the government officially considers China as enemy N1, it started trade war, soon maybe and cold war, but however all americans should unite against China, at least that's the plan of US deep state, but unfortunately they have problems to do it, especially outside USA.
    so i expect next year after the elections, there'll be a huge problem with US economy, it may even collapse and there'll be riots as in Hong Kong or maybe a civil war in USA.

  20. Japan is doing the exact same thing as the US to China. The purpose is to stifle technology development of South Korea, because Japan feels threatened.

  21. After so many rounds of tariffs, China would be manipulating their currency if the Yuan does not fall. You just cannot wish to hit them hard and expect them doing great.

  22. What America has been doing to China in this evil war is simply bullying. Every country can see that. The world is returning to the order of the forest – violence, robbery, bullying, and more to come.

  23. Every news network is trying to re spin the story on companies leaving China.China is kicking US companies out.Trump has very little to do with that besides being the instigator.Trump knows he will not finish out his term if China follows through.

  24. Pres. Trump should not postpone the scheduled tariffs on Chinese goods while they are talking, as this is only a ploy by china to delay any mutually beneficial trade deal.  Make note that China, under the CCP, cannot be trusted.  They formerly agreed to the terms of the initial trade negotiations with the US only to renege on that agreement in the end.  They also promised NOT to militarize their illegally reclaimed artificial islands in the Spratly archipelago (in the South China Sea), but had already installed surface-to-air and anti-ship missiles on those structures.  They agreed with the UK to maintain the current system of government and laws in Hong Kong until 2047, but they have slowly curtailed some of the people's rights and liberties, resulting in the continuous protest rallies of the people against the communist regime's initiatives.  There is an old saying that goes:  "You fooled me once, shame on you.  You fooled me twice, shame on me."

  25. The way the currency shifted, looks good if US dollars is changed to the Chinese Yen (RMB) Americans can buy more in China.
    If Chinese shoppers, business men, or STUDENTS comes to the US, They have to spend more to get the same amount.

  26. IDK, what's with Americans, honestly.
    Trump is just doing what's right for America, What's wrong with the Nation and Citizens first policy?
    How does one right the unemployment then??

  27. Huang Xiangmo's Leo Liau had taken his own life,Chinese billionaire gave $100,000 cash to NSW Labor 和髸产党黄向墨收买澳大利亚政客的Leo Liau自杀了,豚王毅杨洁篪习近平

  28. We want to buy your high-tech products to make up for the trade surplus. Do you sell them? We trade dollars at the expense of the environment, and the U.S. government just prints dollars.

  29. There's a difference between something being in the rulebook in other words being precedent or tradition and something actually being a rule

  30. I had to stop watching as she attached Trump. It's good to put the right info but also attaching the President at the same time is bad journalism. The bias needs to stop what happened to just facts

  31. What? No mention that the U.S. has three criteria for identifying a currency manipulator and that China only meets one of these criteria (a trade surplus with the U.S.). No mention that the IMF and the rest of the international community claims that China is not manipulating their currency? No mention that the U.S. dollar is presently artificially inflated in value so of course other currencies would lower in value relative to it unless they manipulated their currencies in order to peg them to the dollar? (The yuan is pegged to the Euro, not the dollar). Nice reporting, almost missed all the important points of discussion.

  32. The truth is if China doesn't manipulate the currency, Chinese Yuan would drop even more due to more and more manufacturers move out of China… that is definitely not something the US wants to see…

  33. Who started this trade war in the first place? THE USA! The world economy is only better when the US has sensible and not bullying policies.

  34. "When you can't beat a nation mentally, try and start a war with them." The US and it's depraved people are just waiting for God's wrath.

  35. Don't be misleading. China does not devalue its currency, it just stop popping it up and let the market decides how much the yuan is worth. The IMF already said that much. Trump on the other hand wants to manipulate the dollar lower. Who is the currency manipulator?

  36. USA and CHINA are both SHADY countries…
    They will do everything in there power to destabilise other countries for there own gains…

  37. In the meantime, Federal Reserve has refused Trump's requests for reducing the interest rate to devalue US dollar for several times and Trump condemned FRS for it on Twitter. But I didn't see any US citizen call the chair of FRS a traitor.

  38. Motive behind weakening currency is to make currency as reserve currency for emerging economies
    It is called economic rule manipulation

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