The US’s condition for ending trade war with China
BEIJING –February 20, 2019
During the talks between China and the US, the next round of which is to start this week, both countries agreed that the issue of the yuan exchange rate will become an important part of the deal. Washington expects Beijing to abandon the artificial devaluation of its currency in response to the introduction of US tariffs, SCMP reported, citing Bloomberg.
According to the agency, this issue has been under discussion for several months, but the negotiators have not yet managed to reach a consensus, although Chinese representatives told US Treasury Secretary Stephen Mnuchinthat it is not in their interest to further reduce the cost of the yuan.
At the same time, the Trump administration continues to insist that if China continues to devalue its currency, America will raise tariffs for imports from China.
Over the past year, the yuan has lost 5% in value. Experts suspect this is how China is reacting to the US’s threats in the trade war.
Bloomberg points out that during his election campaign, Trump declared the need to force China to abandon manipulation of the yuan. The implementation of this promise can help the President on the domestic agenda, where influential Republicans are in favor of tough measures against Beijing.
In early February, the White House announced that if the US and China did not come to satisfactory results under the trade agreement before March 1,Washington would increase customs duties on Chinese goods.
Since the beginning of 2018, the US has imposed trade duties against Chinese products more than $250 billion. In turn, Beijing has imposed retaliatory tariffs on American goods.