Trump Currency War / Why are China and Japan threatening Donald Trump's dollar?

Trump Currency War: Ever since Donald Trump became the US President, many controversies have arisen at the global level regarding his policies and decisions. Recently, Trump has expressed concern about the currencies of China and Japan. He accused these countries of deliberately lowering the value of their currencies, which could harm the US economy.

Global tension increased due to US policies

Donald Trump took many such decisions during his tenure, which affected global trade. Even before becoming President, he had talked about imposing tariffs on Mexico and Canada and also implemented it. Under this, a tax of up to 25% was imposed on products imported into the US. Also, a 20% tariff was also imposed on products coming from China. Due to this decision, instability was seen in the global market and the stock markets of many countries including India were affected.

Currency of China and Japan against the dollar

Trump had also accused China and Japan of artificially weakening their currencies during his first term (2018). Recently, he spoke to Chinese President Xi Jinping and the leaders of Japan and clearly warned them not to devalue their currencies. According to Trump, if China and Japan keep their currency weak, it will be harmful for American manufacturers and to prevent this, the US will consider raising tariffs.

Possible effects of currency devaluation

If China and Japan keep their currency weak, it will directly benefit these countries, as their export competitiveness will increase. At the same time, it will have an adverse effect on the US economy, which may reduce the competitiveness of American products in the global market. That is why Trump is constantly threatening these countries to increase tariffs so that they change their currency policy.

Effect of tariff threat

After Trump's threat to increase tariffs, the Japanese Yen became unstable against the dollar and reached 148.60 for some time, whereas earlier it was at the level of 150. At the same time, China has also started various efforts to stabilize its currency. If the US increases tariffs, it will further increase instability in the global market, due to which common people will have to face expensive products.

Conclusion

Donald Trump's economic policies and strategy of imposing tariffs have had a huge impact on the global market. Increasing economic tensions with China and Japan can increase pressure on the economies of the US and other countries. Although Trump is describing his policies as being in the interest of America, its long-term impact will depend on global trade.