How does currency appreciation hurt a country's exports?

I've heard that there is a kind of "currency war" going on right now where every country is trying to stop its currency from appreciating too much in relation to other currencies. The stated reason for this was that it hurts a country's exports when its currency appreciates. Why? Wouldn't exporters just charge lower prices to offset the appreciation?|||An appreciating currency makes it more expensive for other currencies to buy what you produce. In a competitive market, producers can't lower prices because that would be below the marginal cost of production.|||Some developing countries believe that exchange rate is the main factor to determine competitiveness.They all use the pegged system,or managed system to prevent the exchange rate appreciation faster than competitors.Currency war is targeting between the US and China. The US let the dollar depreciate purposefully. China has pegged the Yuan to the dollar. And to keep that rate it must print more Yuan forcefully.It has caused high inflation in China. The Chinese central bank has to increase policy rate 5 times in a row. But it has huge foreign reserve to defend the Yuan.More over most of the countries have not supported the US. China won the currency war.|||It's not a matter of charging lower prices; it's a matter of exchange rates.





If your currency appreciates, then that means it costs more of other people's money to buy your currency and thus your goods. For example, say the dollar appreciates against the yen. A person in Japan wants to buy, I don't know, a car produced in the U.S. for whatever reason. If one dollar is worth 1 more yen today than yesterday, it's going to take more of this person's hard-earned yen to exchange to dollars and buy the car, and therefore buying the foreign car is more expensive than buying in the U.S. itself.





Therefore people abroad buy less if your currency appreciates and exports suffer.|||I think the reason you cant just lower prices is because your prices are part of a greater scheme for example, if you lower prices in your currency, then you will have less operating cash overall to pay your labor-force other local bills. That's really the a key element as to why its a bad thing, even if you lower costs of your products your costs that go into making those products may not change so your kind of stuck.



These situations may be kind of a generalization though like youre thinking because what matters just as much 9 times out of 10 is how much your materials that go into making the products that you're selling cost as well. so its not as simple as exporter importer just like that there usually several exporters and importers along the line.



An example of this scenario is the US and China. China keeps its currency low so we can buy more of their stuff in dollars. So they keep getting US business, which takes away from US local production. So you have US resources going to China to pay for goods. The only profit that is being made in the US is the marginal cost for the goods, or the profit the vendors are making off of the goods sold. China on the other hand is taking the money that is being used to buy its products and it is cycling through their economy. Workers and paying rent, and buying food, and supporting business in their local community, etc etc to a much greater extent than they are in the US in this example. Its really more about these overall flows of goods for money. The money is more valuable because its all relative to the greater economies of the importer and exporter in these cases. Its harder to really notice the difference in the relationship of the importer and exporter because these are usually large scale distributors that make a little money over and over again on the sale of countless products that they import and export. Whats key to the relationship perhaps is the consumer vs vendor relationship. Its better to be making goods then selling them as a vendor per se. I think is really the point of the argument, because you can put more people to work making then selling.



So in the conclusion of the example, good for the US as individuals we can go to China and stay in a fancier hotel for a night or something but as a business, its better to be making goods in China and selling them to the US because its cheaper to make them in the China overall, and u get a more valuable currency in exchange for your goods, and things are good for you in China, because in your currency if weaker maintaining a good standard of living is easier for you and your employees etc to maintain. and your making a profit in china because 15 dollars for example will buy you more in China than it will in America. Its kind of convoluted, but its a lot about the cost of maintaining a healthy standard of living for a labor force, just as much as it is profiting off of individual transactions I guess you could say overall.