Report: Trump dragged America into an endless currency war with China

US President Donald Trump has not miscalculated, dragging the United States into an endless trade and currency war, according to a Bloomberg report.

The agency said that Trump's plan to pressure Beijing to bear the cost of tariffs imposed by Washington on Chinese goods has adversely affected the economy of his country.

According to researcher Peter Cobb, Trump was aiming at his plan to raise the federal government's fiscal revenue, not to harm the American consumer, and to pressure Chinese competitors. But economic reports revealed that US consumers bear the burden of almost all tariff costs as Chinese exporters have yet to significantly reduce prices because net profit margins were already minimal and they had no room for cuts.

The researcher said that although China effectively lowered its product prices on August 5 by weakening its currency, the move angered the US president and prompted the Treasury to formally accuse the Chinese authorities of currency manipulation, which could irritate the Chinese. Making a bilateral business deal more difficult.

Trump does not seem to have a clear idea of ​​foreign trade and its main goals and how to achieve them, as he dragged the United States into a trade war and a currency war endless.

Philips Levy, chief economist at Flexport, said Washington had no clear plan when it entered a trade war against China, while the exit plan was to threaten Chinese competitors to submit to US conditions.

The Chinese yuan has depreciated by 5% since April, affecting the value of commodities.

A big problem
The decline in the yuan against the dollar is a big problem for Trump. As a result, it is likely that Trump will not be able to achieve his stated goal of returning factory jobs to the United States on a large scale.

He said the treasury's accusation of China's currency manipulation was another embodiment of refusing to deal with facts on the ground. In the past, China has held back the value of its currency to gain a competitive advantage, but in recent years it has done the opposite, supporting the yuan against gaining market power.

During this phase of the conflict, Chinese President Xi Jinping cannot make major concessions to Trump because he would be considered a hostile foreign power.

"It was a grave mistake on the part of the Trump administration to declare a trade war with China instead of making legitimate complaints to the WTO," the report quoted Anne Krueger, a former World Bank economist and now a research professor at Johns Hopkins University, as saying.

The researcher pointed out that the dollar exchange rate against the yuan will be the most important figure in the financial world in a few weeks.

Everyone is losing
The researcher also says Trump is right to be concerned about the devaluation of the yuan. Although this decline protects US consumers from rising prices, it makes American goods more expensive in China, hurting US exporters. For China, the devaluation of the yuan can be considered a powerful weapon.

He says the trade war is hurting nearly all US exporters and hurting farmers after China halted purchases of US agricultural goods in response to Trump's announcement of 10 percent tariffs on Chinese imports.

The researcher quoted Roger Johnson, president of the National Farmers Association, that Trump's strategy of continuous escalation and hostility "has made things worse."

Trump's satisfaction with China's trade conflict with the United States is plausible.

The researcher concluded that the Trump conflict leads the United States and the world to a place whose features remain unclear.