Author: Gram Slattery
WASHINGTON (Reuters) – President-elect Donald Trump’s top trade adviser told Reuters on Thursday that the novel administration would not look “sympathetically” on any attempts by China to manipulate its currency, in response to a Reuters report that authorities there were considering allowing the yuan will weaken next year.
Peter Navarro, Trump’s novel senior adviser on trade and manufacturing, said the White House would not interfere with the Treasury Department’s biannual review of whether foreign trading partners are manipulating their currencies.
But he added: “I don’t think Trump’s Treasury would welcome Chinese currency manipulation. China’s history as a currency manipulator is well known.”
In 2019, the Trump administration designated China a currency manipulator, the first such decision by the U.S. government since 1994. The decision was rescinded the following year.
The move is more symbolic than substantive, but it would nonetheless signal that Trump is willing to engage in an unprecedented trade war with the world’s No. 2 economy, as he often threatened during the campaign.
The 2019 move came after a period in which the Chinese government allowed the value of its currency to decline against the dollar.
Reuters reported on Thursday that top leaders and policymakers in China are considering allowing the yuan to weaken in 2025 in preparation for higher U.S. trade tariffs once Trump returns to the White House.
The move under consideration reflects China’s recognition that it needs more economic stimulus to counter Trump’s threats of punitive trade measures, Reuters reported. Trump has said he plans to impose a 10% universal tariff on imports and a 60% tariff on Chinese imports into the United States.
Navarro, who also served as an economic adviser during Trump’s first term, said Trump may choose to escalate tariffs even further if China weakens its currency rather than wait for the Treasury’s semiannual report.
“The countermeasures are there,” Navarro said. “If (Trump) didn’t want to wait for any report, he could have just raised tariffs.”
