Thursday, June 13, 2019

Currency War or Trade War? Two Edged Dilemma for US and China

Does China (Trump) want to fight a trade war or a currency war?

Before addressing the question, let's take a the US quarterly goods trade deficit with China.

Net Goods Trade with China Quarterly

Trade Deficit Timeline

The US trade deficit with China blasted higher starting in 2004.
Despite a 26% appreciation in the yuan (Renminbi) starting 2005, the US trade deficit blast continued.

From 2015 until the second quarter of 2018, the trade deficit with China shrank.

From the moment Trump launched tariffs in July of 2018, the trade deficit shrinkage reversed.

Trade War Timeline

China Briefing has a Trade War Timeline.

It pegs the start as July 6, 2018. That's when Trump first announced tariffs on China...

- Source, Mish Talk, read more here