It's possible for the Chinese yuan to depreciate by another 10 percent against the dollar if the United States continues to raise tariffs on China imports, independent economist Andy Xie told CNBC on Friday.
A "significant depreciation" of 10 percent is possible if the U.S. follows through with its threat to raise import duties on Chinese goods to 25 percent at the end of this year, said Xie, who was formerly with Morgan Stanley.
"The currency fluctuates reflecting the economic challenges, so when you have tariffs rising on you, the currency adjustment is inevitable," Xie said.
The trade conflict between the world's two largest economies escalated this week when the United States imposed 10 percent tariffs on another $200 billion worth of Chinese imports on Sept. 24, with the duties set to rise to 25 percent on January 1, 2019.
President Donald Trump has frequently cited China's $375 billion trade surplus with the U.S. as evidence of unfair trade practices, and is trying to use tariffs to narrow the trade gap.
China has referred to the levies as a "gun" to its head, and vowed to dig in its heels even while indicating a willingness to negotiate.