Last week, President Donald Trump announced that the United States would put 10 percent tariffs on $300 billion worth of Chinese goods, effective Sept. 1. The announcement came as a bit of a surprise since the two countries restarted trade talks in Shanghai last week. With more tension on the table than talking trade, China has pushed back by halting U.S. agricultural imports.
The Chinese government has asked its state-owned enterprises to suspend purchases of U.S. agricultural imports and products, people familiar with the situation said, according to Bloomberg News.
In addition to halting U.S. imports, the Chinese government let its currency sink to the weakest level in over a decade. According to Fox Business, “The onshore Chinese yuan weakened to worse than seven per U.S. dollar, hitting its lowest level since 2008, as Beijing looks to cushion the blow from Trump’s tariffs. A weaker yuan makes Chinese goods cheaper for overseas buyers, which may be necessary as China just lost its spot as the US’s biggest trading partner.”
Trump said in a tweet on Monday, “China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation’. Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”
With all the new revelations from this weekend, China and reaching a trade truce seems even further away. From halting U.S. agricultural imports and manipulating the Chinese yuan, China seems to be pushing off a trade deal.