People’s Bank of China lowers yuan fix to three-week low after fresh tariff salvo by Washington
Any heavy-handed response by China to Donald Trump’s new tariffs, such as flat-out import restrictions, could bring the big market ‘bears out of hibernation’, an analyst has warned
China’s central bank lowered the daily yuan reference rate to its weakest level in over three weeks on Tuesday after US President Donald Trump announced overnight that America will impose a graduated tariff hike, starting with 10 per cent on about US$200 billion worth of Chinese imports before moving to 25 per cent at the start of 2019.
The US tariffs had already been well telegraphed to markets in the past week. The implementation of graduated hikes and the revised tariff list which excludes some consumer goods is milder than expected, analysts said.
A 10 per cent tariff will apply from September 24, eventually rising to 25 per cent on January 1, in a phased approach that will contain the rise of US inflation, and help some Chinese exporters, analysts said.
China’s Ministry of Commerce said on Tuesday it would be forced to take “synchronised counter measures” against the latest tariffs announced by Trump.
In a statement, the ministry also said that the tariffs had “added new uncertainties” to talks between the two sides.
