The Chinese yuan has weakened past 7 per US dollar on the global currency rating scale for the first time since 2008.
By letting the currency slide, China aims to make its exports cheaper and gain a trade advantage, which is seen as a response to the White House’s threat to add 10% tariffs to $300B worth of different Chinese imports.
China is really not messing around
Chinese politicians have long taken pride in preventing the yuan from ever dropping below 7 to the US dollar. But now, 2 years after the trade war began, desperate times call for desperate, uh, re-measuring.
The country also asked state-owned companies to suspend imports of US agricultural products.
Spiteful or not, the move has certainly sent the US markets skidding.
It’s a war within a war
Yesterday, the Dow plunged to its lowest depth of 2019. And, according to CNBC, former Fed Vice Chairman Alan Blinder said he would not be surprised if the US were to retaliate against China in the currency markets.
Many have speculated since last year that the US could also begin weakening the dollar, which would throw 2 global superpowers right smack dab in the middle or a currency war… within a trade war.