If Tariffs Increase, Offshore Renminbi Will Depreciate Sharply, Says Nomura’s Chan

The transcript discusses the potential escalation of trade tensions between the US and China, focusing on President Trump's risky tariff strategy. It examines the implications for markets, particularly the offshore yuan, and debates the likelihood of China being labeled a currency manipulator. Various scenarios are considered, including the probability of tariffs going into effect and the chances of reaching a trade deal.

What is the main reason for the high risks mentioned in the first section?

• The tariffs have already been retracted.

• There is a short window for a favorable outcome before tariffs are formalized.

• China has already agreed to all terms.

• The Federal Register has not published the tariffs yet.

What could happen to the offshore yuan if the 25% tariff is implemented?

• It will be unaffected.

• It will depreciate sharply.

• It will remain stable.

• It will appreciate significantly.

What is the likelihood of a trade deal being reached according to the third section?

• 100%

• 60-70%

• 45-50%

• 0%

What is one potential accusation against China if the yuan depreciates?

• Reducing exports.

• Increasing interest rates.

• Increasing tariffs.

• Being a currency manipulator.

What is the probability that the tariffs will not come into effect on Friday?

• 20%

• 80%

• 40%

• 60%