【Goldman Sachs expects Trump to increase tariffs on China, USDCNY may rise to 7.4-7.5】

Goldman Sachs predicts that Trump's presidency will raise the effective tariff on China by 20 percentage points, which will drag down China's GDP growth rate by 0.7 percentage points. Although this increase in tariffs is lower than the 60% claimed by Trump, Goldman Sachs points out that the 60% high tariffs will mainly focus on strategically important areas and products that heavily rely on the U.S. supply chain.

In response to the impact of tariffs, China may take three major measures: 1) moderate depreciation of the yuan, 2) reduce imports from the U.S., 3) increase domestic fiscal easing efforts. Goldman Sachs expects that USDCNY may depreciate by 4-5% to 7.40-7.50, which will partially alleviate the tariff pressure. $USDC