China considers weakening yuan to counter potential Trump tariffs, risking economic stability.

Chinese authorities are considering weakening the yuan to counter potential trade tariffs from a second Trump presidency. This move could make Chinese exports cheaper and ease the impact of tariffs, deviating from the usual practice of maintaining a stable currency. The yuan might depreciate up to 7.5 per dollar, a 3.5% drop from current levels, to boost economic growth and combat deflationary pressures. However, it could also trigger capital outflows and affect financial markets negatively.

3 months ago
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