How low can the yuan fall?

Last week US President Donald Trump announced that he is going to impose 10% tariffs on $300 billion of goods from China, in addition to the $250 billion worth of imports from China that already attract 25% tariffs. In an underhand strategy, China smuggles large quantities of the synthetic opioid Fentanyl into the US. In its usual response, China denied that it is a source of Fentanyl, just as it denies economic espionage, intellectual property theft, forced technology transfer and other crimes. Can China stop smuggling of Fentanyl? Absolutely. This is a nation that has no problems in abducting little children from their parents and confining them in camps for brainwashing. In retaliation to Trump, China weakened its currency, the yuan, and instructed all state owned companies to stop buying US agricultural products to hit Trump's voters. The US has declared China a 'currency manipulator'. Chinese President Xi Jinping maybe banking on Trump losing next year's re-election and a more sympathetic Democratic candidate in the White House, so he is willing to accept any damage to the Chinese economy, probably lulled by China's importance in the global supply chain. Wall Street analysts warned that China's currency devaluation is "on a scale of 1-10, it's an 11" in its trade war with the US. "The most celebrated victories in Chinese history are not based on valor, but on deception. These successful battle strategies are rigorously taught in Chinese academies and are an integral part of the Chinese leadership's worldview," wrote S Deb. No longer. "China wants to capture the emerging hi-tech industries of the future with one goal in mind: to replace the United States as the world's dominant power," wrote SW Mosher. "This is President-for-life Xi Jinping's "China Dream," and it's revealing that he no longer hesitates to admit it." C Block wrote about "the wave of reverse merger frauds from the last decade in which literally hundreds of fraudulent companies from China, listed in the US, collectively raising tens of billions of dollars from investors. The funds went to China, separated forever from those wronged by the fraud." "President Trump's critics like to denounce him for coddling dictators," wrote Ying Ma. And yet, "Trump has proudly and noisily waged a trade war against China, something that no recent US president -- all far more dignified in their rhetoric -- has come close to threatening." At $5 trillion, Japan's economy is less than half the size of that of China, but the Japanese yen is seen as a safe haven currency, while the Chinese yuan is not. China has been overtaken by Mexico and Canada as the biggest trading partner for the US. For us in India it is simple. The US is an on-off friend, but China is an existential threat. Good luck to the US.