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The inseparable twin of a trade war

The depreciation of the renminbi in recent weeks has raised fears that China is aiming to counter US tariffs by weaponising its currency

Biju Paul Abraham & Partha Ray

The trade war that US President Donald Trump initiated last year is morphing into new forms of economic conflict with far-reaching implications for the global economy. On August 1, Trump announced that the US would impose a 10 per cent tariff on all imports from China which were not yet subject to the higher tariffs that he had imposed since March 2018. On August 5, China allowed its currency, the renminbi, to slip below the psychologically important 7 renminbi to a dollar barrier. Since this marks a 11-year low for the Chinese currency, various questions tend to spring up. Are we witnessing ...