US demands China keeps yuan stable over fears of trade war backlash, sources say ahead of Washington talks
- Negotiations resume on Tuesday and are expected to continue until Friday as the March 1 trade war truce deadline for higher US tariffs approaches
- China’s foreign exchange intervention has long been a political target in the US and Donald Trump vowed to declare China a currency manipulator in 2016
The United States is asking China to keep the value of the yuan stable as part of trade negotiations between the world’s two largest economies, a move aimed at neutralising any effort by Beijing to devalue its currency to counter American tariffs, people familiar with the ongoing talks said.
Officials from the two countries are discussing how to address currency policy in a memorandum of understanding that would form the basis of a deal that ultimately will have to be approved by US President Donald Trump and his Chinese counterpart Xi Jinping, according to several people involved in and briefed on the discussions.
While the precise wording remains unresolved, a pledge of yuan stability has been discussed in multiple rounds of talks in recent months and both sides have tentatively agreed it will be part of the framework of any final deal.
Negotiations resume on Tuesday in Washington and are expected to continue until Friday as the March 1 deadline for higher US tariffs approaches.
A spokesman for the US Trade Representative’s office, which is leading talks for the White House, did not immediately respond to a request for comment.
The Bloomberg Dollar Index fell to 0.3 per cent to a session low following the report, and the offshore yuan rose to an intraday high of 6.75 per dollar.