Surprise, China just devalued its currency... again! Over the past 24 hours, the People's Bank of China decided to depreciate the Yuan by 1.9%, making the U.S. dollar the strongest performing currency to date. This monetary action is nothing new in the current era of globalization; in fact, China has long been (rightfully) accused of purposely devaluing its currency so as to increase foreign direct investments and heighten its export-driven economy. While the Yuan has historically traded at a 6:1 ratio against the dollar, widespread economic consensus pegs the natural value of the Yuan at roughly 4:1. Now, as China's centrally-planned economy struggles to maintain growth expectations, President Xi Jinping has "encouraged" (or ordered) bureaucratic financial planners to let the Yuan "float." As such, the Yuan now trades at a nearly 6.6:1 ratio against the dollar; although these political actions should hypothetically boost China's short-term growth, they may ultimately plague the country's long-term ambitions.
Much like the now defunct USSR, China has become an increasingly vexatious world superpower. Whether it be the endless cyberwar President Xi continues to wage against American institutions, nonstop theft of private and governmental intellectual property, ignorance of international laws, unparalleled modern military expansion, frequent military encounters with U.S. warships and aircraft, extreme ongoing industrial pollution, or development of artificial military zones in the hotly contested South China Sea, the Communist Party continues to (successfully) test its luck against the Obama administration and other Western powers.
Enter Trump: the man destined to fix America's economy (or so he says). While you may disagree with many of Trump's viewpoints, his international trade rhetoric is truly reflective of the current global economic landscape. Although the Ricardian Model states that two entities often enjoy overall gains from trade, America's GDP potential has long-suffered at the hands of both its adversaries and allies. For example, Chinese and European currency depreciation results in stronger U.S. dollar purchasing power, meaning that individuals, businesses, and government organizations can technically "buy more" abroad than they can within American confines; conversely, it also means that U.S. companies actually generate less real revenue abroad due to conversion rates (i.e. to realize one American dollar requires an exchange of six Chinese Yuan).
While Trump may be arrogant, he's not an idiot (at least when it comes to business). If there's anything U.S. voters can (or should) agree on, it's that America's growth is in decline (despite media reports), and that, to some extent, this problem is fixable. Our GDP continues to experience downward revisions, and still disappoints, unemployment rates are manipulated (read the fine print - "people actively seeking work"), and stock markets are in turmoil. Trump promises to fix these glaring issues and, while I realize that most politicians are incompetent, deceitful, and toxic human beings, President Xi has sent Trump an early Christmas present. Only time will tell, but I have a feeling China's new fiscal policy will increase Trump's poll popularity.