China Considers Weakening Yuan in 2025 as Yuan Slides to 7.28 Amid Trump Tariff Threats

Dec 11, 2024, 11:30 AM

Chinese authorities are contemplating allowing the yuan to weaken in 2025 as a strategic response to the looming threat of U.S. tariffs under a potential Trump administration, according to sources cited by Reuters. This move is seen as a preemptive measure to counterbalance the impact of potential trade wars and tariffs from the U.S. The consideration of a weaker yuan has led to a significant slide in the currency, with the USDCNH rate climbing to 7.28 on the news. This strategy could make Chinese exports cheaper, thus blunting the impact of any new tariffs. The decision comes at a time when the U.S. dollar is expected to maintain its supremacy into 2025, with Trump's 'America first' policy potentially including new tariffs.