The beggar thy neighbour policy: The currency war between China and America

As in the past, national currencies do not depend on a fixed gold. With the establishment of the Bretton Woods system, which provides the entrance to a new fixed exchange rate system in the world, the collapse of the system after a short time and the transition to the flexible exchange rate system after the collapse, it is observed that the exchange rate fluctuations have occurred to a great extent. Changes in the exchange rate system, which caused exchange wars, also caused major crises to erupt. Exchange rate wars, in the most general sense, can be expressed as the countries trying to provide economic privileges to them by using exchange rates. The exchange rate war is generally referred to as all activities undertaken by countries in order to limit the value of their own currency against the currencies of other countries in order to limit imports and increase exports. It is seen that other countries are engaged in similar activities as the countries that undertake such an activity keep their value low in order to expand their position in the world market. In this way, any economy on the axis of monetary fluctuations may give advantage to another economy by means of export incentive or import restriction. The said exchange rate war, the economy of a country, its own money, the value of the countries in which the trade partners should be below the level of the value should be, the sale and purchase of goods in those countries to target the purchase of goods in those countries and in this context by carrying out such an activity in the neighbor damage. The loss of nominal value, which causes the goods produced in the country to become cheaper for foreigners, causes the goods produced abroad to become expensive for the citizens of the country. On the other hand, nominal value gain vi causes the goods produced abroad to be cheaper with the citizens of the country and the goods produced in the country become expensive for foreigners. The United States and China have two major monetary powers among the world economies. Looking at the historical development process, the United States has a state history since 1776 and China is one of the oldest civilizations in the world. The two countries, which have had a rising economy in the last century, have been in confrontation since 1979 and sometimes have had close relations. After China became a member of the World Trade Organization, it became a major threat in the field of foreign trade among the world countries and became the world's biggest economic power with the United States. In the first part of the study, exchange rate, exchange rate systems and exchange rate policies will be discussed. In the second part, the exchange rate systems applied in the USA and China over the years and the power of both economies in the world and their economic relations with other countries will be discussed. In the last part of the study, it will be explained whether the devaluation policy pursued by China in the axis of harming the Neighbor is against the USA and other countries, the exchange rate wars between the United States and China will be discussed and it will be tried to put forward what kind of events this war may cause in the world. Key Words: Exchange Rate, United State of America, China, Foreign Trade, Currency War, The Beggar Thy Neighbour Policy