Trump wants 60% tariff on China, China can respond by letting the yuan fall

Useful points made by Senior Fellow at Council on Foreign Relations (CFR) Brad Setser.

I'd only add that China has already begun to let the yuan drop. We had the heads up on this from HSBC, and they were spot on:

• HSBC expect the USD/CNY reference rate to drift higher (yuan weaker)

(USD/CNY chart below)