China may pursue expansionary monetary and fiscal policies and devalue the yuan in response to US President-elect Donald Trump's hike in import tariffs. This assessment was provided by Bloomberg. “China’s GDP will grow more slowly due to Trump’s second term, although such losses could be partially offset by fiscal and monetary stimulus,” Bloomberg reports the words of Dennis Shen, chief economist for China at Scope Ratings. At the same time, the Chinese authorities may devalue the national currency to compensate for the damage from increased tariffs, the agency notes.
The offshore yuan exchange rate could weaken to 7.5-7.7 units per US dollar if tariffs increase by up to 60%, Bloomberg believes. China may also take retaliatory tariff measures due to Trump's protectionist policies. It is most likely that the Chinese authorities may increase import duties on agricultural products from the United States, the agency explains.
Trump, who won the US presidential election on November 5, proposed in his election program to introduce tariffs on imports from China at 60%.
The offshore yuan exchange rate could weaken to 7.5-7.7 units per US dollar if tariffs increase by up to 60%, Bloomberg believes. China may also take retaliatory tariff measures due to Trump's protectionist policies. It is most likely that the Chinese authorities may increase import duties on agricultural products from the United States, the agency explains.
Trump, who won the US presidential election on November 5, proposed in his election program to introduce tariffs on imports from China at 60%.
China imports soybeans, cotton and corn, microchips, SUVs, liquefied petroleum gas and petroleum, coking coal, copper and copper ore from the US. The American side purchases smartphones, computers, lithium-ion batteries, plastic products, security cameras, household appliances, shoes, children's toys and much more from China. In the past few years, Sino-American relations have become more tense, which has affected trade between the two countries. In 2022, their trade turnover reached $759.4 billion, an increase of only 0.6%. In 2023, it decreased by 11.6% and amounted to $664.45 billion.
