China already cheats with it's currency to manipulate it's price.
They also do stuff like give huge loans to poor countries,. knowing those countries can never pay it back.
I'm real curious how china is going to keep at this game...
USA and Europe can handle the turbulence.
China on the other hand has had major economic woes in the past several years.
including a real estate pop.
Keep in mind, china is not all big cities with future tech.
Most of china is country side farmers who are too poor to own the latest cell phone.
China is already stuck between a rock and a hard place. They have slowing domestic demand and slowing global demand. Historically they could dump all of that excess demand in global markets, but with these tariffs they can't. These tariffs puts even further pressure on that and could cause a deflationary scenario which would be catastrophic for them. In such a case, we'd actually might see global deflation not inflation.
If they devalue = global consumers are fine but domestically they are fucked as food and energy imports will go way up in price. If they devalue it also puts less confidence on the Yuan, so bilateral trade partners may say we want to get paid in something else vs Yuan... so much for de-dollarization?
Trump/Bessent made it clear de-dollarization won't be accepted and it's a top priority for USD to remain reserve currency. China devaluing would fall into the trap, because if you devalue your currency you're fucking all those trade partners that 'trusted' your currency's stability.