The US-China trade war is scaling new heights. US President Donald Trump recently announced 10 per cent tariff on $300 billion worth of untaxed Chinese imports. China responded by allowing the yuan to depreciate to its lowest against the dollar since 2008 (Chart 1). The rupee also lost 2 per cent on August 5, its biggest one-day loss in six years.
Earnings on Wall Street have peaked and the US bond yields have slipped (Chart 2), raising an alarm that the US economy might slip into a recession. Further, concerns over global economic growth are rising. While China and the
