China’s exports have been far more resilient in the face of US tariffs than many had expected. But some damage has still been done – our calculations point to a 0.3% of GDP hit as of September. And the cost would have been greater had the renminbi not weakened 4% in trade-weighted terms this year. While US tariffs are a blunt weapon, further increases would still inflict some economic pain on China, especially if the PBOC resisted exchange rate depreciation.
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