6 ways that the #US may try to escalate the #tradewar by Yu Yongding at CASS:
1.More #tariffs. However, there may be an indigenous, natural force in the US to rectify #Trump’s wrong practice of “extreme pressure”.
2.Escalate #investment war. But as long as #China does its own things well, it can retain and attract foreign investments.
3.Cut off the #GVC and strangle China's tech companies.
4.1. Escalate #exchangerate war. Maintaining exchange rate stability under the pressure of #RMB depreciation will inevitably exert upward pressure on #interestrates.
4.2. To maintain #monetarypolicy independence, China has to give exchange rates greater freedom. At that point, President Trump may blame that China manipulates its #currency, and China should be prepared for that.
5. #Financial sanctions. It's very powerful. #China must consider countermeasures. #Europe uses the Blocking Statutes to deal with the US’s financial sanctions. China should speed up relevant legislation to protect the interests of #Chinese #businesses.
6. Freeze China's overseas #assets, including its foreign exchange #reserves. It's already kind of a war, and the #US isn’t likely to go that far. Some entrepreneurs also worry about an #oil embargo.
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