China could devalue yuan to spite Trump – JP Morgan
Beijing’s potential move is a likely response to US tariff hikes, analysts believe An anticipated shift in trade policy during Donald Trump’s second term as US president, including a drastic hike in tariffs on Chinese products, could see the yuan depreciate by up to 15%, according to JPMorgan Chase, as cited by Bloomberg. In a note dubbed “Bracing for a storm” seen by the outlet, the analysts projected US import taxes on Chinese goods to be raised to 60% from the current 20% level, with fresh levies to hit imports from Malaysia and Vietnam. The Chinese government could devalue the yuan in response, and impose retaliatory tariffs to support the national economy, the strategists reportedly said, forecasting that next year growth in China’s gross domestic product could slip nearly one point to 3.9%, in spite of such measures. JPMorgan highlighted that a potential devaluation of the yuan by 10-15% is “significantly less than the 28-30% that could be expected if Chin...