JP Morgan: Possibility of China Devaluing Yuan in Response to Trump : Analysis

JPMorgan Chase analysts predict that the yuan could depreciate by up to 15% in response to potential US tariff hikes on Chinese products during Donald Trump’s second term as president. They anticipate a rise in US import taxes on Chinese goods to 60% from 20%, with additional levies on imports from Malaysia and Vietnam. The Chinese government may devalue the yuan and impose retaliatory tariffs to support the economy, with GDP growth projected to decline to 3.9%. This depreciation is expected to be less severe than in 2018-19 when tariffs were raised to 20% from 3%. Emerging economies like Malaysia, Vietnam, and Mexico are likely to be most affected by a US-China trade war, redirecting exports to other markets. India is expected to face the least impact.

Analysis:
The article provides information on predictions made by JPMorgan Chase analysts regarding the yuan’s potential depreciation in response to US tariff hikes on Chinese products during Trump’s second term. The sources cited seem credible as JPMorgan Chase is a reputable financial institution known for its comprehensive market analyses.

The article presents facts surrounding the potential scenarios of increased tariffs, yuan devaluation, and their impact on various economies. The discussion of potential retaliatory measures by the Chinese government and the projected decline in GDP growth adds depth to the analysis.

The article may have some bias towards a negative outlook on the economic consequences of a US-China trade war, as it highlights possible negative outcomes and the impact on emerging economies. The prediction of a 15% yuan depreciation might be alarming, potentially leading to a sense of unease among readers.

Given the current political landscape and the prevalence of fake news, the article’s accurate sourcing and analytical approach serve to inform the public about potential economic developments. It underscores the impact of trade policies on global markets, highlighting the interconnected nature of economies and the effects of political decisions on international trade.

Overall, the article offers valuable insights into the potential implications of escalating trade tensions between the US and China, with a focus on the financial market’s response to policy changes. It sheds light on the intricate dynamics of international trade relationships and the far-reaching effects of economic policies on global economies.

Source: RT news: China could devalue yuan to spite Trump – JP Morgan