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Trump’s Trade War with China: Impact on EM FX and Rates

US President Donald Trump unilaterally started the trade war with China and he shows no signs of letting up. His policies on trade mark a major departure from America’s long-standing commitment to free markets. The combination of protectionist measures and fiscal profligacy is likely to further increase the challenges faced by American companies in their quest to compete internationally by pushing up the real effective exchange rate.

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