New Twist In The Trade War: China Devalues Its Currency

First, it was a little bit of tariff on a few exports, then a lot of tariff on a lot of exports, and now almost the entirety of exports. Then it was not enough to not buy from Huawei. Disrupt that company's supply chain in America. China could bring Apple's market value down by 500 billion dollars just like that if it wanted. They only design the iPhone in California. 100% of the manufacturing happens in China. America importing from China is not just consumer goods, although one can imagine Walmart very worried right now. A big chunk of imports from China goes into bits and pieces that result in goods produced and services rendered by American companies.

So the escalation was going to be painful all around.

But then the news is China has let its currency slide by just enough points that Trump's tariffs have been completely neutralized. The move is obvious. It could not have taken a lot of thinking.

One wonders what Trump and Xi will talk about when they meet in Japan next month.

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This Turn By Nitish Is Meaningful

BBC News हिंदी - जेडीयू ने आख़िरी चरण में बदली रणनीति, बीजेपी असहज? : पांच बड़ी ख़बरें https://t.co/0pepOTJHfE

— Paramendra Kumar Bhagat (@paramendra) May 16, 2019

This turn by Nitish Kumar is meaningful. He has not said anything new, but his party's declaration that Bihar, Andhra Pradesh and Orissa qualify for a Special Category status by the center is meaningful. There are rumors the BJP is getting less than a majority in Uttar Pradesh and Bihar. If that ends up being true, that will be a sure indication the BJP might not come back to power. If those three states gang up and say we will support whoever gives us Special Category status, that would be a game changer. Because that would torpedo the BJP's chances of forming a government even if they are near 250.

Nitish surely is not worried about Bihar. The RJD would be glad to step in should the BJP walk out.

If this is the thought process then that might be an early indication that as Nitish Kumar sees it, the BJP is not getting the majority of seats in UP and Bihar. It has long been said in Indian politics that there never has been an instance when a party lost UP and still formed the government in Delhi.

If the BJP-led NDA is closer to something like 230, it is possible an expanded NDA might demand a non-BJP PM.

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This Turn By Nitish Is Meaningful https://t.co/eMVqrlbLOT @NitishKumar @PrashantKishor @JanatadalU

— Paramendra Kumar Bhagat (@paramendra) May 16, 2019