- Every time we raise tariffs on China, Chinese Yuan devalues making their exports cheaper, hence cancelling the effect. At the same time US exports are double tariffed – from the currency devaluation and tariff added by China.
- All of US exports to China are tariffed but only half of Chinese exports to US have a tariff. So the other half of Chinese product is becoming more competitive, their companies can more profit on them.
- In 2015 USD Yuan was at 6.20, today it is around 7.19. Yuan wasn’t so weak since 2009. China can fight the trade war for many years but that is decimating US exports. US exports are dropping not just to China but to rest of the world as well.
- As Yuan devalues, so does Euro, Korean Won, Indian Rupee… This makes US exports less competitive around the world vs Chinese/Korean products. Eg. iPhone more expensive in Europe and China, Samsung is cheaper. Makes Boeing more expensive than Airbus.
- Better way to fight China is by isolating them. Together with EU. Human rights is Hong Kong and north China. Why is Huawei getting repeated exemptions?
China is playing this very long, We have so many political considerations and fold easily.. We need to fight smarter.
finance.yahoo.com/news/yuans-longest-drop-since-2015-094307041.html
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