A trade war between the United States and China is a very real possibility after President-elect Donald Trump takes office in just over two weeks, a leading independent economist says.

Key points: Trade war could place tariffs up to 45 per cent on Chinese exports to the US

Trade war could place tariffs up to 45 per cent on Chinese exports to the US Mr Eslake estimates a 7 RNB Chinese-US exchange rate will be the number Mr Trump would use

Mr Eslake estimates a 7 RNB Chinese-US exchange rate will be the number Mr Trump would use China has stepped up efforts to prevent large amounts of money from leaving the yuan

The Chinese currency is heading towards a new low against the US dollar, and the recent fall in the value of the yuan has sparked a mass exit of large amounts of money from China, with no signs of slowing.

Mr Trump began talking about the possibility during the election campaign and if it happens, economists say it could have the potential to derail the Australian economy.

Independent economist Saul Eslake said he believed that Chinese authorities were getting nervous about whether Mr Trump would use the falling yuan as an excuse to spark the trade war.

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Such a war could see tariffs of up to 45 per cent on everything China exports to the US, and Mr Eslake said it would be easy for the US administration to impose steep tariffs on imports from China.

"All that is required under existing US law for the administration to impose very high tariffs on imports from a particular currency is for the treasury to declare it a currency manipulator," Mr Eslake said.

"And the law is completely silent on what sort of evidence needs to be adduced to assert that or indeed for there to be any evidence at all."

But Mr Eslake said a Chinese-US exchange rate of 7 renminbi (RNB) to $US1 would likely be the rate Mr Trump would use to take to treasury as evidence, due to it being a nice round number.

The exchange rate is right now very close to that level at 6.95 RNB.

And economists say China's currency controls could push the Australia dollar lower, which would be good — but there was one big downside.

"We just have to hope that it doesn't happen in the context of the early stages of a trade war between of our most important trading partners," Mr Eslake said.

China steps up efforts to stop currency falling further

Westpac Bank head of market strategy Robert Rennie described it as "probably one of the biggest risks for the Chinese economy right here, right now".

Mr Trump used it to score a political point during one of the presidential debates in September last year.

"We don't know what we're doing when it comes to devaluations and all of these countries all over the world, especially China, they're the best at it," he said.

"What they're doing to us is a very very sad thing, they're taking our jobs, they're giving incentives, they're doing things that frankly we don't do."

However, since Mr Trump's election win the yuan's decline has largely been driven by the US dollar's surge.

In the past 48 hours China has stepped up efforts to prevent large amounts of money from leaving the currency, in an attempt to stop the currency falling further.

Mr Rennie said he recently sent out emails to his colleagues in China to find out what sort of controls the Communist Party had put in place.

"If you go into a bank in China and ask to convert yuan into US dollars, you're being greeted with a couple of forms," he said.

Mr Rennie said the forms ask detailed questions about exactly how many US dollars are to be purchased, and why.