Trump Trade Adviser Issues Warning on Currency Manipulation as China Considers Weaker Yuan
A top trade adviser to President-elect Donald Trump, Peter Navarro, told Reuters on Thursday that the incoming administration would not view any attempt by China to manipulate its currency favorably, in response to a Reuters report that suggested Chinese authorities might allow the yuan to weaken in 2025. Navarro, who will serve as Trump's senior counselor for trade and manufacturing, emphasized that while the White House would not intervene in the Treasury Department's regular review of currency manipulation, it would not tolerate actions from China aimed at artificially weakening the yuan.
Navarro remarked, "I don't believe the Trump Treasury Department would welcome Chinese currency manipulation very fondly. The history of China as a currency manipulator is well-known."
In 2019, Trump's administration labeled China a currency manipulator for the first time since 1994, although the designation was revoked in the following year. While the label had limited practical consequences, it sent a strong signal of the administration's stance against unfair trade practices and set the stage for what Trump had warned could be an unprecedented trade conflict with China.
The 2019 decision came during a period when China had allowed its currency to fall against the U.S. dollar, which some viewed as a response to rising trade tensions.
The Reuters report on Thursday indicated that China's leadership was considering allowing the yuan to weaken in 2025 as a countermeasure to anticipated higher U.S. tariffs, should Trump return to the White House. The potential currency devaluation reflects China's acknowledgment of the need for stronger economic stimulus in the face of Trump's ongoing trade threats. Trump has previously indicated his plans to impose a 10% universal import tariff, as well as a 60% tariff on Chinese imports, further escalating the trade rivalry.
Navarro, who also served as an economic adviser during Trump's first term, suggested that President Trump could choose to escalate tariffs further if China proceeds with weakening its currency, rather than waiting for the Treasury Department's biannual report on currency manipulation. "There's appropriate remedies there," Navarro stated. "If [Trump] didn't want to wait for any report, he could just raise tariffs higher." This comment underscores the potential for even more aggressive trade measures if China takes actions perceived as currency manipulation, continuing the hardline stance on trade that characterized Trump's previous administration.
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