What started as a Trade Tariff Scuffle between the United States and China has evolved into something more of a full-blown economic war! Not only has China willingly devalued their currency on Monday to its weakest since over 10 years ago, a feat which President Trump labelled China a currency manipulator and even predicted the move will weaken the Yuan over time.
He didn’t stop there, he vowed to impose more tariffs on a whole lot more consumer goods coming from China and analysts have predicted that at this stage, it will become very onerous to reverse the implications of the trade wars signalling a recession that neither party can recover from even the global economy as investors are definitely not happy with the effects on the stock market with the volatility index capped at 40% on a seven months high.
But China seems more than ready for whatever may come as not only is China the American Government’s biggest Creditor in possession of about $1.1 trillion in US Treasuries and is very capable of triggering a widespread panic in bond markets but not without self inflicted consequences, A move which the United States feds claim they are ready to handle.
China also seems to be prepared to continuously devalue its currency as predicted by an analyst for a long economic battle with the United States if things take a turn for the worse.
Both Countries are tipping closer to a stalemate where one action to hurt another’s economy will invariably affect the home economy. How will the U.S and China end the prolonged Trade War?
