Source: Taiwan Economic Daily
U.S. President Trump has sacrificed two big moves on the US -China trade war this month, which is to impose 10%punitive tariffs on US $ 3,000 billion in land -based products, and it is announced that China is an exchange rate manipulator.However, his magic weapon is more.
The most fierce that Trump is currently shouting is to take the dollar as a weapon.On the 8th, Trump issued a series of tweets demanding interest rate cuts at the Fed (FED), and promoted the depreciation of the US dollar to benefit US exporters and completely disregarding the commitment to the exchange rate of various countries at the G20 summit.The eagle inside the White House has repeatedly urged the Ministry of Finance to directly intervene in the exchange market.
How effective can FED pay interest rate cuts or direct intervention?In fact, it is not clear.At present, the US Treasury Department holds a exchange rate stabilization fund of $ 92 billion. Even if the FED uses the same amount, it only gets only $ 180 billion, and the global exchange market has a one -day transaction value of up to $ 5 trillion.limited.
However, intervention is not the final weapon of the US government. Trump can also increase the punitive tax rate of all Chinese imported products to 25%.However, if Trump increases the tax rate, it will only make the RMB weaker. Therefore, Trump will not be able to do one and two care between the tariffs and lower the dollar.
In addition, after setting the Beijing manipulation exchange rate, the US Department of Commerce plans to allow American companies to increase taxes for specific imported Chinese product projects; however, once it is implemented, China will also retaliate.
The U.S. government can also further improve China's obstacles to the United States, or cancel the exemption treatment enjoyed by China's imports of Iran and Venezuela oil, and re -prohibit American companies from selling technology products and technology in Huawei. It is also a good strategy.
The Ministry of Commerce is also planning to implement a wider export control to China, covering areas related to robots and artificial intelligence. The list of project lists may not be finalized until the end of this year.
Congress can also help Trump's power. For example, members of the recent proposal requires the FED to control the US dollar exchange rate to benefit exporters, adopt various fund control measures to block Chinese companies enter the US stock market, and completely prohibit American manufacturers from providing zero to China and ZTE to zero.Components, etc.
