In response to US President-elect Donald Trump’s increase in import tariffs, China could devalue the yuan. Bloomberg writes about this.
The publication cites the opinion of Scope Ratings’ chief China economist, Dennis Shen, who predicts slow Chinese GDP growth due to Trump’s second term. At the same time, the expert believes, these losses can be partially offset by budgetary and monetary stimuli.
“Chinese authorities may devalue the national currency to compensate for the damage caused by the increased tariffs.” – points out the agency.
As a result, according to the authors of the article, the exchange rate of the foreign yuan (CNH quote) may weaken to the level of 7.5-7.7 units per US dollar and tariffs will increase by up to 60%.
Additionally, according to Bloomberg, China could take retaliatory tariff measures due to Trump’s protectionist policies.
“Chinese authorities will most likely increase import duties on American agricultural products.” – also writes the post.
In his campaign platform, Trump proposed introducing 60% tariffs on imports from China.
