The Influence of RMB Exchange Rate Fluctuation on Sino-us Agricultural Trade

Abstract

The outbreak of the Sino-US trade war in March 2018 has had an important impact on the economic and trade development of China and the United States bilaterally and the world, with agricultural trade becoming the focus of the dispute. China is the main export of U.S. agricultural products, in recent years has been firmly in the top two U.S. agricultural exports, agricultural trade is bound to bear the brunt of the Sino-U.S. trade war. The trade war led to the Federal Reserve raising interest rates, directly causing the yuan to fall against the dollar. This paper makes empirical analysis through the Granger causal and co-integration test, and establishes the error correction model to adjust the model, selects the data from 1999-2017 as a sample space, and mainly explores the impact of RMB exchange rate fluctuations on Sino-US agricultural trade. The results show that RMB exchange rate fluctuations have indeed had an impact on China-US agricultural trade, and when the RMB exchange rate falls, China's agricultural imports from the United States decrease, and put forward countermeasures for RMB exchange rate fluctuations and Sino-US agricultural trade to reduce the adverse effects of Sino-US trade disputes.