China will not devalue currency to beat Trump's punitive tariffs

Cornelia Mascio
Settembre 21, 2018

China plans to reduce the average tariff rate on imports from most of its trading partners as soon as October, Bloomberg News reported on Thursday.

While the direct economic impact of the dispute on China has so far been limited, the trade tensions could rapidly push Chinese exporters to switch away from the US market, a former chief of China's central bank said on Wednesday.

The Bloomberg report did not specify the countries that could enjoy lower Chinese tariffs. The world's two largest economies had already slapped tariffs on $50 billion of each other's exports.

The trade war intensified this week, with President Trump announcing new tariffs on $200 billion of Chinese products and Beijing retaliating with tariffs on $60 billion of USA imports.

While the new round of 10 percent tariffs does not amount to much more than a slap on the wrist for the Chinese economy, National Economic Director Larry Kudlow said earlier this week, during a talk at the Economic Club of NY, that the Chinese stock market "has had a very rough time" and "their economy is suffering quite a bit".

Kudlow added that the tariffs are part of Trump's "grand strategy of negotiating", and he did not see any reason to think the administration's trade policies would damage the USA economy.

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