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The currency war, China's response to Trump

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Jason Lee / REUTERS

This time, the deal seems serious. In any case, it is the opinion of Lawrence Summers, former Secretary of Treasury Bill Clinton: "We could be at the most dangerous financial moment since the crisis [de 2008] with the current developments between China and the United States "warned the ex-boss of Harvard University on Twitter. This is due to the commercial war between the United States and the United States, which, on Monday, August 5, has turned into a monetary war.

While Donald Trump had decided, on the previous Friday, to tax an additional 10% to 300 billion dollars (about 269 billion euros) of Chinese imports from 1st September, Beijing fought back. Not by taxing US imports – China does not buy enough "made in America" ​​to do this – but by suspending the purchase of And, most importantly, a 1.9% decline in the renminbi (RMB), its biggest decline since August. Conversely, the dollar has crossed the symbolic threshold of 7 RMB, reaching 7, 1087 in the Hong Kong market.

Furious, Donald Trump complained to Beijing to use the valuation as a commercial weapon, while, in the evening, the American Treasury officially declared that "China [était] a currency manipulator  ». "In recent days, she has taken Confounding measures to evaluate her motto", accused Washington, for whom she seeks, in doing so, to "To grant an undue competitive advantage in international trade".

Indeed, the best way to counter US tariffs is to lower the price of its products by debasing, even if the governor of the Bank of China, Yi Gang, assured Monday, in a statement, that fluctuations in his currency were "Guided and determined by the markets".

Article reserved for our subscribers Read also Will the trade war with the United States turn into a currency war?

Puzzle for central banks

The US administration believes that the power of Beijing has a long experience in this area, and that it is acting in violation of the G20's commitments not to engage in competitive misjudgment. . The last time China had used this weapon, it caused a distrust of investors. Analysts believe that the country will not have to undergo such a bronca this time, especially because of exchange controls it has established in order to avoid capital flight. The statement from the American Treasury was released after the closing of the financial markets, after a black day, the worst of 2019. Lâ € ™ à¢ à ¢ â,¬Å¡ÃƒÂ ¢ à¢ à ¢ â,¬Å¡Ãƒâ € | The Dow Jones Index was 2.90%, the Standard & Poors 500 2.98% and the Nasdaq Technology Index, 3.47%.

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