Beijing has allowed the Chinese yuan, or renminbi (RMB), exchange rate to weaken, with the offshore yuan falling to 7.4290 per U.S. dollar amid escalating U.S.–China trade tensions.

On April 8, the People’s Bank of China (PBOC) set the yuan’s central parity rate at 7.2038, marking the first time since September 2023 that the rate has surpassed the 7.20 threshold.

The depreciation of the yuan is widely seen as a countermeasure by Beijing to offset the impact of the new U.S. tariff hikes. During U.S. President Donald Trump’s first term, Beijing allowed the yuan to depreciate by more than 10 percent against the dollar in response to tariffs.

On April 4, the Chinese communist regime announced that starting from April 10, it would impose a 34 percent tariff on all imports from the United States, and 16 U.S. entities would be placed on an export control list. This would prevent six U.S. companies from engaging in import and export activities related to China, and export controls would also be imposed on seven types of rare earth-related products.

White House Press Secretary Karoline Leavitt said on April 8 that nearly 70 countries had reached out to Trump to initiate trade negotiations.

Southeast Asian countries like Indonesia, Cambodia, and Vietnam—one of the main regions from where made-in-China products are rerouted to the United States—have all expressed their desire to find a solution with Washington to restructure their trade in a way that doesn’t favor communist China.

Beijing is the only one in the region resorting to retaliation.

On April 7, the three major A-share indexes in China experienced significant declines. The Hong Kong stock market saw a significant decline, with the Hang Seng Index plunging by 3,021 points, or 13.22 percent, closing at 19,828 points, marking its largest single-day points loss since 1997.

The sharp falls in the Chinese and Hong Kong stock markets at the opening were seen as a direct reaction to the escalation of the U.S.-China trade conflict.

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