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Doesn't the increase in cost of supplying the money that Americans need to buy Chinese goods (buying TBonds) just offsetting making goods cheaper?
by chrisjc 7y ago
Doesn't the increase in cost of supplying the money that Americans need to buy Chinese goods (buying TBonds) just offsetting making goods cheaper?
- jussij 7y agoFor many years the value of the Chinese exports to the USA have been much greater than it's USA imports. This large trade surplus basically means China earns a lot of USD and it uses those US dollars to buy US T-Bonds. So for T-Bonds the USD/Yaun exchange rate does not come into the picture. But that low USD/Yaun exchange rate does help to keep Chinese exports cheap and that then helps to protect their trade surplus.
- Fjolsvith 7y agoIts win/win for the USA. Trump gets to push the Chinese around and American consumers get to keep buying cheap Chinese goods.