China Considers Yuan Devaluation as Tariff Risks Loom Under Trump
Reports suggest Beijing may allow the yuan to weaken in 2025 to counteract potential U.S. tariffs under President-elect Donald Trump, raising economic and trade concerns.
- Chinese officials are reportedly discussing a controlled depreciation of the yuan in 2025 to offset the economic impact of tariffs proposed by President-elect Donald Trump, including a 60% levy on Chinese imports.
- A weaker yuan could make Chinese exports cheaper internationally but may increase costs for domestic consumers and heighten financial risks globally.
- The People's Bank of China has emphasized maintaining a 'basically stable' exchange rate, but analysts suggest a shift to greater flexibility tied to non-dollar currencies like the euro is being considered.
- U.S. Treasury Secretary Janet Yellen warned against currency manipulation, stating the U.S. would respond strongly to any such actions, while Trump's trade team signaled potential escalation of tariffs if devaluation occurs.
- The yuan has already depreciated nearly 4% against the U.S. dollar since late September, with market analysts predicting further declines as trade tensions and economic uncertainties grow.
CNA 
South China Morning Post 
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