Trump Plans 10% Tariff on All Chinese Imports from February 1

Amid escalating trade tensions, President Donald Trump announced a potential 10% tariff on all Chinese imports starting February 1, raising concerns about its impact on China's economy and currency. Analysts warn that these tariffs could exacerbate the ongoing weakness of the yuan, complicating efforts by Beijing to stimulate economic growth and address issues like sluggish domestic consumption and a property sector debt crisis. Economists predict that if the tariffs are implemented, the yuan could reach its lowest level against the US dollar in two decades, potentially leading to capital outflows reminiscent of the 2015 economic turmoil. The proposed levies are seen as part of Trump's strategy to push China toward a more favorable trade relationship, yet they may also hinder negotiations for reducing tariffs. A weaker yuan might benefit Chinese exporters but could intensify trade tensions with the U.S., complicating the overall economic landscape. In response to these challenges, China's leadership is likely to consider measures to stabilize the currency while balancing the need for competitive export pricing.