China may pursue expansionary monetary and fiscal policies and devalue the yuan in response to rising imports customs by the newly elected US President Donald Trump, writes in an analytical material ag. Bloomberg.
„China's [GDP] growth will be slower due to Trump's second term, although those losses may be partially offset by fiscal and monetary stimulus,” said Dennis Sheng, chief China economist at Scope Ratings, cited by Bloomberg. At the same time, Chinese authorities may devalue the national currency to offset the damage from the increased tariffs, the agency noted. The offshore yuan exchange rate (quoted by CNH) could weaken to 7.5-7.7 units per US dollar if tariffs are increased by up to 60%, according to Bloomberg.
China may also take retaliatory tariff measures due to Trump's protectionist policies. It is most likely that the Chinese authorities will increase tariffs on imports of agricultural products from the United States, the agency explains.
Trump, who won the US presidential election on November 5, proposed in his campaign program the introduction of tariffs on imports from China of 60%.
China imports soybeans, cotton and corn, microchips, jeeps, liquefied petroleum gas and oil, coking coal, copper and copper ore from the US. The American country buys from China smartphones, computers, lithium-ion batteries, plastic products, security cameras, household appliances, shoes, children's toys and much more.
Over the past few years, Sino-US relations have become more strained, affecting trade between the two countries. In 2022 their trade turnover reached 759.4 billion. USD, which is an increase of only 0.6%. In 2023 it decreased by 11.6% and amounted to 664.45 billion. USD.