REUTERS

China’s top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher US trade tariffs as Donald Trump returns to the White House.

The contemplated move reflects China’s recognition that it needs bigger economic stimulus to combat Trump’s threats of punitive trade measures, people with knowledge of the matter said.

Trump has said he plans to impose a 10 percent universal import tariff, and a 60 percent tariff on Chinese imports into the United States.

Letting the yuan, depreciate could make Chinese exports cheaper, blunting the impact of tariffs, and creating looser monetary settings in mainland China.

Reuters spoke to three people who have knowledge of the discussions about letting the yuan depreciate but requested anonymity because they are not authorised to speak publicly about the matter.

The People’s Bank of China (PBOC) did not immediately respond to Reuters requests for comments. The State Council Information Office, which handles media queries for the government, did not also immediately respond to a request for comment.

Allowing the yuan to depreciate next year would deviate from the usual practice of keeping the foreign exchange rate stable, the sources said.

The tightly managed yuan is allowed to move 2 percent on either side of a daily mid-point fixed by the central bank. Policy comments from top officials typically include commitments to keeping the yuan stable.