A truce was reached in July in the year-long trade war but was shattered last Friday when Trump vowed to slap a 10% tariff on $300bn of Chinese imports from 1 September.
It seems that the ongoing clash between the United States government and China trade market is not going to end anytime soon.
China has released trade figures that show a surprise 3.3% rise in exports in July, despite the escalating trade war with the US.
"In pulling the yuan higher, it is not only looking to manage any decline, but also looking to contain any damage in terms of confidence in their stewardship of the Chinese currency and economy", said Michael Hewson, chief market analyst at CMC Markets.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. The Chinese government said in June that any purchases must be at a reasonable level, suggested Beijing was becoming more cautious about making big commitments before it sees what Washington offers in exchange. It would raise borrowing costs by encouraging an outflow of capital from the world's second-largest economy.
Things got worse on Monday evening when the United States, for the first time in years, labeled China a currency manipulator.
He said: "A country can not be designated as a currency manipulator only because of one or two days' exchange rate fluctuations".
The surplus with the United States was little changed but stood at $28 billion, a level that might fuel American pressure for Chinese concessions in trade talks.
China's trade surplus fell to $45.1 billion for the month, from $51.0 billion in June.
The United States has not stepped into the currency market since 2011, when the Group of Seven advanced economies carried out a joint intervention to help stabilize the yen following the devastating natural disaster in Japan, and avoid potential fallout on global financial markets.
"This hopefully can offset some of the downside risks from the U.S. China bilateral trade". It said the yuan's decline was driven by market forces.
The newspaper, run by the Xinhua agency, said several government departments were now drafting policies and considering revising catalogues specifying what technologies should be imported.
Other safe haven assets that saw big gains on Monday include U.S. Treasury bonds and the Japanese yen.
A rising yen would depress import prices, making it more hard for Japanese Prime Minister Shinzo Abe to attain his signature goal of beating decades-long deflation and for the Bank of Japan to meet its 2 percent inflation target.
USA businesses and consumers paid $6 billion in tariffs in June, a 74 percent rise from the same period a year ago, a coalition of US trade groups said Wednesday, warning a new round of tariffs would exacerbate job losses and dent demand.
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Barack Obama avoided them, limiting his workplace immigration efforts to low-profile audits that were done outside of public view. Last year, the administration hit a landscaping company near Toledo, Ohio, and a meatpacking plant in eastern Tennessee.