Attention Economy


Tuesday, January 21, 2025

Trump, China, and the Dollar

China’s Trump Dilemma
https://www.project-syndicate.org/commentary/china-trump-dilemma-whether-to-challenge-dollar-hegemony-by-yanis-varoufakis-2025-01
Will the China hawks in Donald Trump’s administration railroad him into a confrontation that transcends tariffs and embraces financial sanctions of the type the US and the European Union imposed on Russia? If they do, China's leaders will have to decide whether to decouple from the dollar-based international monetary system.  

One Weapon China Is Reluctant to Deploy Against Tariffs: A Weaker Currency
https://www.wsj.com/finance/currencies/us-china-tariffs-yuan-currency-value-d274ea9c
The last time Trump hit China with tariffs, Beijing devalued the yuan, blunting the impact. This time, Xi Jinping has signaled the country should defend its currency.