INTERNATIONAL
Bessent says China's yuan rate is bigger problem for Europe than US
US Treasury says China's weak yuan hurts Europe more than US as trade shifts and tensions rise over currency and export imbalances. - REUTERS
WASHINGTON: U.S. Treasury Secretary Scott Bessent said he views China's yuan valuation as a bigger problem for Europe than the United States, as the currency has risen against the dollar but has declined against the euro.
AI Brief
Bessent said in an interview with Reuters and Bloomberg in Madrid, following U.S.-China talks on trade and TikTok there this week, that U.S. tariffs on Chinese imports were bringing down U.S. trade deficits, adding that Chinese trade with the U.S. was down 14% this year but up 6.9% with Europe.
Asked whether he spoke to Chinese Vice Premier He Lifeng about opportunistic devaluation of the yuan, Bessent said on Monday, "Well, they haven't done it to the U.S. The RMB is actually stronger this year versus the dollar. Now it's at an all-time low versus the euro, which is a problem for the Europeans."
The yuan, also known as the renminbi or RMB, has hit record lows of more than 8.4 to the euro EURCNY= in recent months compared to 7.5 at the start of 2025. Trade and currency experts say this is aiding a flood of Chinese exports to Europe that is fueling the European Union's trade deficit with China and agitating trade tensions between Brussels and Beijing.
At the same time, the yuan CNY= has risen slightly against the dollar this year, from 7.3 to the dollar in January to 7.1.
Asked whether the yuan's decline was due to manipulation, Bessent said: "It's a closed currency. So they manage the level."
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AI Brief
- China's currency has weakened against the euro but strengthened against the dollar, affecting Europe's trade balance.
- US tariffs have reduced Chinese imports to the US while exports to Europe have increased, raising tensions.
- Treasury Secretary Bessent says China manages its currency level, but denies manipulation targeting the US.
Bessent said in an interview with Reuters and Bloomberg in Madrid, following U.S.-China talks on trade and TikTok there this week, that U.S. tariffs on Chinese imports were bringing down U.S. trade deficits, adding that Chinese trade with the U.S. was down 14% this year but up 6.9% with Europe.
Asked whether he spoke to Chinese Vice Premier He Lifeng about opportunistic devaluation of the yuan, Bessent said on Monday, "Well, they haven't done it to the U.S. The RMB is actually stronger this year versus the dollar. Now it's at an all-time low versus the euro, which is a problem for the Europeans."
The yuan, also known as the renminbi or RMB, has hit record lows of more than 8.4 to the euro EURCNY= in recent months compared to 7.5 at the start of 2025. Trade and currency experts say this is aiding a flood of Chinese exports to Europe that is fueling the European Union's trade deficit with China and agitating trade tensions between Brussels and Beijing.
At the same time, the yuan CNY= has risen slightly against the dollar this year, from 7.3 to the dollar in January to 7.1.
Asked whether the yuan's decline was due to manipulation, Bessent said: "It's a closed currency. So they manage the level."