US ruling on China’s alleged yuan undervaluation could stoke further rift in relations
- US Department of Commerce due to release findings next week on whether Chinese yuan is undervalued and so constitutes an economic subsidy
- The ruling could set an important precedent, paving the way for the yuan exchange rate to be used to determine possible trade penalties
As the Trump administration intensifies its economic pressure on China, analysts are wondering if the yuan’s exchange rate will be dragged back into the middle of the dispute.
The US is due to conclude its preliminary investigation into whether the yuan is being undervalued to give Chinese exporters an advantage on Monday.
The US Department of the Treasury said in a statement it had provided its assessment to the commerce department “consistent with the priority of the Trump Administration to address unfair currency practises”.
The investigation into tiny wire and plastic fasteners used to seal packages could set a big precedent, paving the way for the highly controversial idea of using the yuan exchange rate to determine possible trade penalties.