Trade Dispute Between US and China is Escalating

Forex News

US-China trade war, rising corporate bankruptcies, and a steep decline in the value of the Chinese yuan versus the US dollar have raised concerns that China's economy could face a steeper slowdown. The Chinese government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more "active" fiscal policy.

Last week, the People’s Bank of China (PBOC) said it will impose a reserve requirement of 20% on some trading of foreign-exchange forward contracts. That will effectively make it more expensive to short the yuan, which fell on Friday to the lowest since May 2017. China’s officials also released a list of $60 billion in US goods that Beijing intends to hit with tariffs, in retaliation for Trump’s plan to impose duties on $200 billion in Chinese imports.

China's strictly controlled news outlets have frequently rebuked the United States and the Trump administration as the trade conflict has escalated, but they have largely refrained from specifically targeting Trump. Today, Chinese state media lashed out at US President Donald Trump's trade policies in an unusually personal attack, and sought to reassure investors worried about China's economy as growth concerns rattled its financial markets.