By Craig Wilson
This post Trump’s Currency War Battle with China Goes Live appeared first on Daily Reckoning.
Welcome to the currency wars. The Trump administration has entered a new low in relations with China. The change comes after the White House announced it is officially beginning to take aim at China’s economic strategy.
As friction between the world’s greatest economic powers deteriorates toward a high stakes currency war, the global economy could see spillover in financial, geopolitical and trade arenas.
The White House recently announced its plan to open up fresh investigations into Chinese trade and intellectual property practices. Now that China’s 100 days are up following Trump’s meeting with President Xi Jinping, the White House is no longer holding back on contempt for China.
President Trump campaigned on a hardline message on China, but seemingly backed off of rhetoric after entering office. That approach changed after his geopolitical targeting on Twitter that lashed out at the Chinese government and the lack of action toward North Korea.
I am very disappointed in China. Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet…
— Donald J. Trump (@realDonaldTrump) July 29, 2017
Conditions on the Korean peninsula appear as though they will continue to escalate, and as they do the expectation is that it will drive a major wedge between the U.S and China. What that means is conditions are extremely ripe for a trade and currency war between the respective economic powers and their global trade operations.
All hope is not lost, yet. That is primarily because a significant amount of pressure has been placed on the North Korean regime. Seemingly, as goes the China-North Korean relationship so swings the pendulum of the Trump administration.
The latest round of United Nations Security Council sanctions that had unanimous votes from China, Russia and the United States shows progress. The achievement at the U.N was as much about North Korea as it was about the ability of the U.S and China signaling bi-lateral cooperation.
However, within the current system, regardless of ongoing negotiations, both governments appear destined for conflict. One can only imagine how, in such a nationalist based system, a currency war could detrimentally impact those at the lower end of the economic spectrum. That’s why those in government leadership — even those who might not be directly involved — have major reason to try and work together.
Here are the major issues and repercussions looming in the U.S-China divide:
Trade Wars
Currently, to do business in China foreign companies are required to disclose technology with the government and any foreign subsidiary involved with the agreement. This requirement is largely where issues of intellectual property, technology and trade problems have arisen.
Under the leadership of Trump’s appointed U.S. Trade Representative, Robert Lighthizer, the administration is expected to roll out a significant policy overhaul. For Lighthizer, a strong critic of free trade, this opportunity allows for the administration to bring penalty measures against …read more
Source:: Daily Reckoning feed
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