China just showed why Trump can't win with tariffs

An escalating tariff war is a losing strategy, but there's another way

President Trump.
(Image credit: Illustrated | Alex Wong/Getty Images, JOHANNES EISELE/AFP/Getty Images, Tatomm_iStock)

China opened up a new front in President Trump's trade war on Monday, sending Wall Street into a tizzy.

Basically, China's central bank adjusted the value of its currency down to its lowest point in over a decade. Investors, fearing President Trump will respond with another tariff escalation, reacted by fleeing stocks for the safety of bonds and Treasuries — causing the S&P 500 and the Nasdaq to fall 3 percent and 3.5 percent, respectively, by the end of the day. And they're likely right. Yet it's also the case that the low value of the renminbi versus the U.S. dollar really is a problem worth addressing.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.