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Washington accused Beijing Monday of manipulating the yuan, which fell to 11-year lows against the dollar. An additional reason for the escalation of the trade war that had already intensified in recent days between the two countries.
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<p>Tensions between the United States and China are still up a notch, Monday, August 5. Washington estimates that Beijing is manipulating its currency and intends to ask the International Monetary Fund (IMF) to put an end to this unfair competition, said US Treasury Secretary Steven Mnuchin in a statement. He added that Beijing's conduct was "a violation of China's G20 commitments to refrain from any competitive devaluation".
A fall in the yuan favors Chinese exports and can mitigate the impact of rising US tariffs on Chinese products.
In the morning, on Twitter, the US president had already accused China "of continuing to touch billions of dollars taken in the United States through unfair trade practices and manipulation of the currency."
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!
Donald J. Trump (@realDonaldTrump) August 5, 2019
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<p><strong>Free falling stock markets</strong>
The Chinese yuan has fallen, at the beginning of the day, below the symbolic 7 per dollar for the first time since 2008, raising fears of an extension of the trade dispute between Beijing and Washington to the currency field. The dollar, meanwhile, widened its losses after the release of the release of the US Treasury, yielding nearly 0.7% to return to its lowest level since early January against a basket of reference currencies.
The news of the fall of the yuan – seen as an escalation in the trade war between the world's two largest economies – has caused a general decline in financial markets in Asia, Europe and ultimately the United States. The three major Wall Street indexes recorded their worst day of the year: the Dow Jones Industrial Average lost 2.90%, the Nasdaq, with strong technological coloration, yielded 3.47%, and the broad S & P index 500 contracted by 2.98%.
The Monday evening Treasury announcement is not expected to have any immediate practical consequences, but it should contribute a little more to the concern of investors and companies, who are trying to gauge the impact of a lasting confrontation between Beijing and China. Washington on their business.
Beijing is targeting American farmers
Another consequence of Sino-US tensions: the official China News Agency announced in the night of Sunday to Monday that Chinese companies had stopped buying agricultural products from the United States. Beijing would target US farmers, highly dependent on the Chinese market and which constitute an important electoral base for Donald Trump, in the run-up to the 2020 presidential election.
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The Sino-US trade conflict has been amplified by Washington's decision to levy additional tariffs on September 1 on 300 billion Chinese products that are not yet taxed. And this, despite the resumption of high-level trade negotiations between the two countries, which had stalled since the spring.
With AFP and Reuters
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https://www.france24.com/fr/20190806-etats-unis-accusent-officiellement-chine-manipuler-monnaie-yuan
