China Will Send a Weaker Yuan to the Trump Front
Beijing’s first line of defense against higher tariffs is likely to be its currency. Good thing that it fits in with a dour economy.
Today’s China doesn’t want a freefall.
Source: Bloomberg
In the strong-dollar policy’s heyday in the late 1990s, Treasury Secretary Robert Rubin would often be probed for nuance in the doctrine. He was loath to change; even the smallest deviation or difference of interpretation could cause huge ructions in foreign-exchange markets. Journalists would push on whether prolonged strength furthered American interests. The scrutiny was fair; the former Goldman Sachs boss wasn’t averse to the occasional shift. There were rare instances when it served Washington to allow the dollar to soften, or even to sell it. Rubin was aided by a long boom that sucked money into the US. Conditions matched the stance. Pragmatism ruled.
Chinese officials today can relate.