Summary of Key Points from the Conference Call Industry Overview - The focus is on the Asian foreign exchange (FX) market, particularly the impact of US tariffs on the Chinese Yuan (RMB) and other Asian currencies [1][8]. Core Insights and Arguments 1. **Tariff Announcement**: US President Trump announced an unexpected additional 10% tariff on all imports from mainland China effective from 4 March, primarily due to unresolved issues related to fentanyl [2][8]. 2. **Trade Policy Context**: This tariff announcement aligns with the "America First Trade Policy" and "America First Investment Policy," which aim to review and impose stricter investment curbs on China [3][8]. 3. **Impact on RMB**: The external pressures on the RMB are increasing, with theoretical USD-CNY outcomes projected to rise to a range of 7.40-7.65 if tariffs increase significantly [4][8]. 4. **Current USD-CNY Fixing**: Since Trump's inauguration, the USD-CNY fixing has fluctuated between 7.1691 and 7.1740, with a ceiling for spot trading at 7.31-7.32 [5][8]. 5. **Future Projections**: If the new tariffs are implemented, the USD-CNY fixing could revisit previous highs, but short-term increases are doubtful due to the upcoming National People's Congress [6][8]. 6. **FX Policy Defense**: The People's Bank of China (PBoC) is expected to adopt a defensive stance to manage the RMB's depreciation and maintain confidence in the currency [11][18]. 7. **Correlation with Other Currencies**: Most Asian currencies are highly correlated with the movements in USD-CNH, indicating that they will likely be negatively affected by the US tariffs [20][12]. 8. **Risk of Currency Manipulation Scrutiny**: The US administration may scrutinize several Asian currencies for potential manipulation, which could complicate the economic landscape for these countries [12][8]. Additional Important Insights 1. **Macroeconomic Levers**: The PBoC may need to utilize domestic macroeconomic tools to counteract growth pressures arising from the tariffs [11][8]. 2. **Trade Exposure**: The report highlights the exposure of various Asian economies to US tariffs, particularly those that have increased exports to the US since 2018 [12][8]. 3. **Sector-Specific Tariffs**: Upcoming product-specific tariffs on sectors such as metals, autos, pharmaceuticals, and semiconductors could further impact Asian currencies [13][8]. 4. **Long-term RMB Strategy**: There is a long-term strategy to promote RMB acceptance among trade partners to reduce reliance on the USD [11][8]. This summary encapsulates the critical points discussed in the conference call, focusing on the implications of US tariffs on the RMB and other Asian currencies, as well as the broader economic context.