The U.S. labeling China a currency manipulator is nothing but an “empty threat,” said Stephen Roach, a senior fellow at Yale University.

The formal designation came a day after China allowed its currency to breach a psychologically important level, with the yuan falling to 7 against the dollar on Monday — the first time since 2008 that’s happened.

“I don’t think Beijing is going to really respond to this name-and-shame approach by the Trump administration ... I think this in and of itself is an empty threat, ” Roach told. 

“But if the U.S. does escalate further on the tariff front, or try other sanctions, then as we saw overnight, there will once again be intensification of pressure coming back from the Chinese. They have plenty of options to consider as the recent move in the bilateral exchange rate demonstrates,” Roach said.