The Chinese yuan fell to its lowest level on record against the dollar on Monday over concerns of a sharp escalation in the ongoing trade war between Beijing and Washington, Reuters reported.
According to Reuters, the US-China trade dispute has reportedly prompted international investors to seek other assets, including the Japanese yen and gold.
The Chinese currency weakened to 7.0177 to the dollar on Monday following US President Donald Trump’s latest threat of tariff hikes on Chinese goods, AP said. The yuan’s weakness is among a series of Washington’s complaints fueling tensions with the Trump administration.
US officials claim a weak yuan makes China’s exports too inexpensive, hurting foreign competitors and swelling Beijing’s trade surplus, according to AP.
On Thursday, Trump vowed to slap 10-percent tariffs on a further $300 billion worth of Chinese imports starting 1 September.
The Chinese Foreign Ministry said Friday that Beijing was ready to take countermeasures if the US introduces more tariffs on Chinese goods.
The day before Trump’s announcement, the United States and China ended trade talks in Shanghai, which the White House described as “constructive,” saying that China was committed to increase purchases of US agricultural exports.
Beijing and Washington have been engaged in a trade war since June 2018, when Trump announced he was imposing tariffs on $50 billion worth of Chinese imports in a bid to balance the trade deficit. Since then, the two countries have introduced several rounds of reciprocal tariffs.
The presidents of the United States and China previously met on the sidelines of the Osaka G20 summit in June, during which Trump said he was ready to reach a mutually acceptable trade agreement. In less than a week, however, he announced 10 percent tariffs, blaming China for not keeping promises to buy more US agricultural products.