Currency manipulation can lead to trade tensions from "summary" of International Money and Finance by Michael Melvin
Currency manipulation involves a country intentionally devaluing its currency to gain a competitive advantage in international trade. This can lead to trade tensions between countries as other nations may view this practice as unfair and harmful to their own domestic industries. When a country devalues its currency, its exports become cheaper for foreign buyers, while imports become more expensive for domestic consumers. This can result in a trade imbalance, with the manipulating country exporting more than it imports. Trade tensions can arise when countries feel that their domestic industries are being negatively affected by currency manipulation. For example, if a country's exports become less competitive due to the de...
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