Say I’m a Chinese manufacturer of plates. I have an American customer buying 6m yuan worth every year. Previously that cost them $1m USD. Now it only costs them $857k. In both cases I’m getting 6m yuan, so I’m happy. Or, do I increase the price to 7m yuan because I know that’s what the customer Usually pays, now I’m VERY happy?
Does this achieve the goal of growth (6m to 7m yuan) or does it not count because the volume stayed the same?
Absent the tariffs it would depend on the specific supply and demand for the good. I suspect both the manufacturer and the customer would split the value in some way.
Interestingly, the growth to the economy arises through how the devaluation impacts the savings and consumption rate for the countries in question. Weakening the yuan depresses Chinese household consumption and subsidies foreign household consumption. It is this change in national savings and consumption that drives the trade balance.
Earlier need to pay less but need to pay more due to devaluation. So it reduces profits and there by investments and capital expenditure.
That's the reason trade war is reverberated across globe especially in raw material and component countries like Australia, Germany, France, Japan and Korea.
This will bring down a global slow down not specific to China and USA. Since Global trade is always multi-lateral and impact can't be gauged completely.
Moreover investments are driven by perception and this lower profits and growth outlook will dampen the overall sentiments.
That depends on how you write your contract.
FOB or CIF? CFR perhaps. And what plates? Trade finance? Company finance? LOC? Volume of plates, consistency, mass, packing material, details on delivery?
Trade shipping contracts do go into 50 pages for a reason.
Unless the "somewhere else" uses the yuan, currency devaluation doesn't work that way. Even if the exchange rate is tied to the dollar by fiat, devaluing it does so against all other currencies, because nobody is going to accept less yuan for their euros than they could get by exchanging euros for dollars and then dollars for yuan.
But that still doesn't mean they can raise prices, because the whole point of the currency devaluation is to make them more competitive. Raising prices does the opposite. And you can't claim the whole thing as margin if that would have caused you to lose the contract to begin with, which was the original reason for the currency devaluation. You may also have to compete with other local suppliers who are operating under the same nominal reduction in local costs.
Depends on the fees at each hop. A small fee could eat up the whole arbitration opportunity for our hypothetical EU or US buyer.