Donald Trump's World of Leaning Arguments is now richer by one particularly lopsided argument: the American president accuses the Chinese government of currency manipulation - even though it has simply stopped artificially supporting the currency's rate.
Ostensibly this is just a new twist in a conflict that has been smoldering for many months. In fact, the move makes clear that in his Chinese counterpart Xi Jinping Trump has apparently found an opponent who is not as easy to defeat as others. For the rest of the world, the fight of the giants does not bode well. A recent survey by consulting firm Oxford Economics shows that nothing bothers business people worldwide as much as the trade wars and their implications for the global economy.
Yet Trump has beaten quite successfully in these struggles according to his own standards so far. One country after another granted him concessions when he threatened punitive tariffs. The South Koreans have eased the import regulations for American cars, Mexico has tightened the border controls for refugees from Central America, most recently, the EU has agreed to import more beef from the US.
The fact that this actually helps the American economy to resize is doubted by most economists. For Donald Trump, however, these were symbolic successes that were well received by his base and seemed to confirm his aggressive political style. For a long time it looked as if the Chinese would also get involved in the game: introduce a little more American soybeans here, open their own market a little bit there for foreign corporations and then a nice ceremony where a new trade agreement is signed. This scenario now moves into the distance. In any case, in the Chinese state media, the US is accused of wanting to move the country to "surrender", which will be resisted.
Price history of the Chinese yuan in US dollars
Source: finanzen.net © ZEIT-Grafik
In fact, there are forces in the US government that are more concerned than opening the foreclosed Chinese markets. Rather, this faction - which is attributed to Trump's commercial director Peter Navarro - wants to prevent China's economic and geopolitical rise to world power. The trade conflict is, from the point of view of those people, an instrument to achieve this goal. Trump follows a familiar pattern. He is constantly increasing the pressure, hoping to prevail in the end.
The latest escalation: Last week, Trump announced it would impose import tariffs on Chinese goods worth $ 300 million, in addition to the existing sanctions. Thus, virtually all Chinese exports to the United States fall under the customs regime.
The leadership in Beijing then saw domestic companies introduce less agricultural products from the US, which affects rural American states. There live many of the supporters of Donald Trump. Above all, Beijing admitted that the country's currency - the yuan - briefly fell to its lowest level in eleven years against the US dollar. This will make Chinese goods cheaper in dollars.
World trade - Why are there trade conflicts? The trade dispute between the US and China, the world's largest economies, is still not settled. The video explains the trigger and possible consequences. © Photo: Liza Worker