Trump's currency war and the end of the American-led global trading system

Is Trump trying to change China, or separate from it entirely?

President Trump.
(Image credit: Illustrated | ALASTAIR PIKE/AFP/Getty Images, str33tcat/iStock, Fourleaflover/iStock)

America's trade war with China has escalated and expanded to new frontiers in the past few days. First the Trump administration announced new tariffs on some $300 billion of Chinese goods. The Chinese retaliated by announcing a halt to purchases of all American agricultural products. Finally, the Trump administration labeled China a currency manipulator for (ironically) halting its sales of dollar-denominated assets. Those sales had been propping up the value of the Chinese currency, the renminbi. The value naturally fell when that intervention ceased.

The market's response has not been kind, as stocks tumbled and the yield curve on bonds lurched towards inversion, a fairly reliable predictor of recession. From the perspective of many observers, that's enough to prove that the trade war has gotten out of hand, and that it's time for both sides to step back and cool off.

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Noah Millman

Noah Millman is a screenwriter and filmmaker, a political columnist and a critic. From 2012 through 2017 he was a senior editor and featured blogger at The American Conservative. His work has also appeared in The New York Times Book Review, Politico, USA Today, The New Republic, The Weekly Standard, Foreign Policy, Modern Age, First Things, and the Jewish Review of Books, among other publications. Noah lives in Brooklyn with his wife and son.