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'The Biggest Loser in This Is China:' Trump Admin Says US Has Upper Hand in Trade War

08-07-2019
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Tensions are high between the US and China after the Asian nation let its currency sink and halted purchases of US farm goods. Some experts warn the trade war between the two countries could seriously harm the global economy if it continues to head downhill.  

"Market participants are growing increasingly fretful that the prospect of a U.S.-China compromise is at risk of being snuffed out completely," said Han Tan, Market Analyst at FXTM.

The stock market made a partial comeback Tuesday after China indicated it would stabilize its currency.

Stocks bounced back after Monday's massive 767-point drop-off.  On Tuesday, the Dow Jones Industrials gained 311 points and the S&P closed up 1.3%; the first gain in seven days.
 
But anxiety is returning after China once again devalued the Yuan on Wednesday, despite a new statement from its central bank governor pledging: "Not to use exchange rates for competitive purposes" and to keep the Chinese currency "at a reasonable and balanced level."

Now it appears China is at it again, setting the rate just below 7 Yuan to the dollar.

Despite the uncertainty, the Trump administration says China is getting the worst of this trade war.

"They're in poor shape economically," said White House Economic Advisor Larry Kudlow. "We're in great shape economically. And frankly the biggest loser in this is China right now."

Stephen Moore, an economist with the Heritage Foundation agrees.

"They're just not growing as fast as they had been," Moore said in an interview with CBN News. "Another thing that's happening because of this trade war is there's a lot of disinvestment. Investors from around the world are pulling their money out of China because they're worried about the future of that country."

However, China's state-owned businesses are pledging not to buy US agricultural products, putting the hurt on American farmers.

The president took to Twitter saying, "Our great American farmers know that China will not be able to hurt them."

Kudlow promises farmers will continue to get assistance from the White House.
 
"Farmers are great patriots," he said. "They support us 100 percent."

China's aggressive action comes after the administration threatened to impose new tariffs on $300 billion of Chinese goods.

Moore says China has been abusing its trade relationship with the US for decades and pointed out that it's getting worse every day.
 
"They have walked back from the agreement that President Trump had with them, at least he thought that he had with them," explained Moore. "They're engaged in all sorts of issues with respect to national security. They're stealing intellectual property. They have not opened up their markets to our producers the way we've opened our markets to them. So, Trump is fighting the good fight here."

In the end, he believes the two sides will reach an agreement because China needs US markets.
 
"There's an old saying that Trump used to say that, 'If we can't trade with China, we sneeze. If they can't trade with us, they catch pneumonia'," Moore added.

One issue that could blow up trade negotiations is if China's cracks down with its military on the ongoing protests in Hong Kong. 

China has released a propaganda video showing armed forces engaged in anti-riot training. Tuesday China warned the protestors not to mistake patience for weakness. 

Meanwhile, China and the US are expected to resume trade negotiations in September. 

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