The yuan and the U.S. dollar traded slightly lower on Tuesday following an announcement by the Trump administration that the U.S. would put 10% tariffs on $200 billion in Chinese goods, which will go up to 25% at the end of the year.
The USD/CNY pair was trading at 6.8640 by 12:01AM ET (04:01 GMT), up 0.1%.
The fall in the Chinese yuan came after U.S. President Donald Trump said in a statement on Monday that U.S. is slapping 10% tariffs on $200 billion worth of Chinese goods, and that the tariffs would rise to 25% in January 2019.
Trump added that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly,” he said in the statement.
“But, so far, China has been unwilling to change its practices.”
According to reports, the U.S. removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals, along with some other products.
