USA president Donald Trump plans to add a 10 percent tariff to another 300 billion dollars of Chinese imports on 1st September. Without a trade deal the global economy will continue to suffer not just China and USA economys. Part of the trade war rhetoric from USA is that China is manipulating its currency to keep it artificially low to gain a competitive advantage.
A weaker yuan makes Chinese exports more competitive or to put it another way a weaker yuan makes it cheaper to buy more Chinese goods with foreign currencies.BusinessRiskTV
Here in the UK the low value of the pound is held up as a bad thing for the UK economy. The airwaves are full of woe about the negative effects of the low value of the pound on the UK. In the USA president Trump moans about the Federal Reserve keeping the value of the dollar too high with too high interest rates. In addition the USA Treasury classed China as a currency manipulator as it claims China manipulates its currency to keep it lower than warranted.
The USA Treasury says China manipulates its currency to keep it lower to improve its international balance of trade and gain unfair competitive advantage in international trade. USA is taking steps in a trade war to lower the value of the dollar and push up value of the yuan.
Why does president Trump and China want lower currency valuation and UK whinges and bellyaches over low value of pound?BusinessRiskTV
It seems that many people with their own political agenda are happy to talk the UK into a recession it does not need to enter if it looks at the opportunities from selling more overseas from UK. If you are open to more ideas to grow your business faster contact us.
Most of the FTSE 100 companies in the UK benefit from a low value in the pound. Their profits are in dollars and when converted to the pound these companies receive a currency benefit to business performance. Investors including the UKs pension funds receive a low value in currency beneficial bonus.
Furthermore the UK is benefiting from more income from more tourists coming to the UK. UK tourism money from overseas visitors will help boost UK economy. Business leaders in UK tourism industry should be going all out to attract visitors to their business. The low value of the pound is giving these UK tourism related businesses a competitive advantage.
Without having to enter a trade war or manipulate its currency the UK has been dealt cards that includes low value of the pound. Instead of encouraging UK business leaders of SMEs and large firms to export export export the UK media and political opportunists talk down UK economy. The result is that the UK is failing to taking advantage of the low value of the pound.
By constantly talking up Brexit uncertainty and ignoring the real threats and opportunities from the current global economic conditions the UK will suffer more pain than it needs to that Germany Japan France Italy and most other countries are suffering too.
Scores of central banks around the world have recently lowered interest rates to cope with the global economic slowdown. The UK can use the low value of the pound to trade its way out of the global economic slowdown. It could that is if business leaders focused on the real threats and opportunities from the low value of the pound.
Subscribe to BusinessRiskTV for free alerts and bulletins to help protect and grow your business with less uncertainty
Enter code #BusinessRiskTV
Promote and market your business on BusinessRiskTV UK Currency Conundrum for 12 months
Recommended further business risk management articles and videos
|Risk Academy||Online Marketplaces|
|Online Exhibitions||Enterprise Risk Magazine|
#BusinessRiskTV #UKeconomy #UKbusiness #UKmagazine #BusinessMagazine #CompetitiveAdvantage #UKcurrency #TradeWar #Brexit #USA #China #EuropeanUnion