Trump’s Trade Adviser Pronounces Potential Currency Manipulation by China
Peter Navarro, President-elect Donald Trump’s senior trade advisor, warned that any attempt by the new administration not to accept currency manipulation won by China. This statement is contained in reports that the country intends to allow the yuan to weaken in 2025 bec
Navarro’s Worry regarding Currency Manipulation
Navarro, destined to be a senior counselor for trade and manufacturing under Trump, expressed concern about China’s potential action affecting the yuan. He said the Trump administration would not look favorably on any attempt on part of China to move currency. Though Navarro did clarify that the White House would not interfere in terms of Treasury Department’s regular reviews with regards to foreign trade practices, still, history bears ample evidence that China is classic in terms of manipulating its currency.
China’s Response to the Accusations
Chinese embassy in Washington described Navarro’s claims as baseless and refused to recognize them. It further reiterated that it will not enter into competitive currency depreciation, and as a responsible global power, China is expected to avoid doing so.
Trump’s Earlier Move toward Manipulating Currency
The Trump administration reported, for the first time since 1994, that China was “manipulating currency” in the year 2019. Then, it was reversed within a year. Though it was largely symbolic, such action showed Trump’s readiness to enter a trade war with China against the second-largest economy.
China’s Plan to Weaken Yuan
Reports have indicated that China’s leadership has been mulling over plans to allow yuan depreciation this year, 2025, in anticipation of trade tariffs that might be applied in the event of a Trump return to office. This would have to do with Trump’s proposed tariffs, namely, a universal 10% import tariff and a 60% tariff on Chinese imports. A necessary step taken by China is the great recognition that stronger economic measures need to be implemented in order to offset the effect of Trump’s trading policies.
Trump’s Possible Reaction to Currency Devaluation
Navarro GOEs further to note that even if China were to weaken the yuan, Trump could throw far greater tariffs without even waiting for the Treasury’s biannual review. The Trump administration is said to have the arsenal to fight back such ruses through very aggressive tariffs.
Conclusion
This balance is more sensitive with regard to global economic relations as the yuan may become weaken by China in the wake of putting up potential trade tariffs by the U.S. Trump trade adviser Peter Navarro sounded a vehement “no” against the manipulation of currencies, a clear indication of the administration’s serious turn toward fair trade. As the country braced itself toward escalating trade hostilities, such as through the increased imposition of tariffs, both nations would still make difficult choices critical in shaping their economic futures. This point calls for transparency and cooperation within those countries to prevent further tensions from straining an international economy.
FAQs
Q.1 What is manipulation of currency?
A.1 Currency manipulation by a country is an undertaking by which the country artificially controls the values of its currency so that it has an undue advantage over others in international trade activities. This usually means devaluation of the currency to make exports cheaper and imports more expensive.
Q.2 Why is China accused of currency manipulation?
A.2 Countries such as China have been often accused of freezing their currency, the yuan, in order to boost their economy through exports. The devaluation of yuan currency makes goods from China cheaper overseas and offers a heighted competitive advantage.
Q.3 What does Peter Navarro have to say about China’s currency policy?
A.3 Peter Navarro, who is a trade adviser to Donald Trump, warned that the U.S. and government won’t take actions by China to weaken its currency.
