China's yuan has slumped to an 11-year low, prompting US President Donald Trump to accuse Beijing of "currency manipulation." The dive has also shaken other currencies in the region.
Image: Getty Images/AFP
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The Chinese yuan fell more than 1% on Monday, dropping below the 7-per-US-dollar mark for the first time since the global financial crisis.
Asian markets also fell on Monday: Tokyo closed down 1.6% and Hong Kong declined 2.9%.
Trump accused China of "currency manipulation" after the yuan weakened to 7.0391 to the US dollar, making one yuan worth 14.2 cents — its lowest level since February 2008. A weaker yuan results in cheaper Chinese exports.
The People's Bank of China said there was nothing significant about the yuan's weakened value, but added that it was the result of "unilateralism and trade protectionism measures."
Masashi Hashimoto, senior currency analyst at MUFG Bank, said "this could well be the biggest moment for the yuan this year. The impact of US-China trade is turning out to be very big."
The latest threat from Washington comes on top of the $250 billion worth of Chinese products already subject to a 25% levy. China has issued its own retaliatory tariffs, taxing $110 billion worth of American goods.
Anxiety over an escalation in the spat also hit other currencies in the region on Monday. The Australian dollar shed 0.35% to $0.6773, hitting a seven-month low of $0.6748. The Korean won fell 1%, reaching a three-year low of 1,218.3 per dollar while the new Taiwan dollar dropped over 0.7% to a two-month low.
US President Donald Trump has repeatedly boasted that the tariffs he has imposed on trading partners are a financial windfall but, research shows it is Americans who bear the brunt of the impact. DW has an overview.
Image: picture-alliance/newscom/B. Greenblatt
Solar panels and washing machines
The first round of tariffs in 2018 were on all imported washing machines and solar panels — not just those from China. A study by economists from the Federal Reserve Bank of
New York, Columbia University, and Princeton University found that the burden of Trump's tariffs — including taxes on steel, aluminum, solar panels falls entirely on US consumers and businesses who buy imported products.
On Friday May 10, 2019 President Donald Trump imposed sanctions on $200 billion (€178 billion) worth of Chinese goods. The move raised tariffs from 10% to 25% on a range of consumer products, including cell phones, computers and toys. China's Commerce Ministry said it "deeply regrets" the US decision.
Image: Getty Images/AFP/STR
Issues with the EU
In April 2019, the United States said it wanted to put tariffs on $11.2 billion worth of goods from the EU. The list includes helicopters and aircraft from Airbus as well as European exports like famous cheeses such as Stilton, Roquefort and Gouda, wines and oysters, ceramics, knives and pajamas.
Image: Imago/Ralph Peters
EU fights back
The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for US tariffs on European steel and aluminum. Targeted US products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminum.
Image: Getty Images/AFP/M. Ralston
European automakers next?
May 17, 2019 is the deadline for President Trump to decide on imposing tariffs on vehicle imports from the EU. According to diplomats, Germany, whose exports of cars and parts to the United States are more than half the EU total, wants to press ahead with talks to ward off tariffs on automakers Volkswagen, Mercedes and BMW.
Image: picture alliance/dpa
India not exempt
India, the world's biggest buyer of US almonds, on June 21, 2018 raised import duties on the nuts by 20% and increased tariffs on a range of other farm products and US iron and steel, in retaliation for US tariffs on Indian steel. Trump said last month that he would end preferential trade treatment for India, which would result in US tariffs on up to $5.6 billion of imports from India.
Image: Getty Images/AFP/R. Schmidt
North American neighbors in tariff spat
Mexico on June 5, 2018 imposed tariffs of up to 25% on American steel, pork, cheese, apples, potatoes and bourbon, in retaliation for US tariffs on Mexican metals. While to the north, Canada on July 1 imposed tariffs on $12.6 billion worth of U.S. goods, including steel, aluminum, coffee, ketchup and bourbon whiskey in retaliation for US tariffs on Canadian steel and aluminum.
