On Tuesday, China's central bank, the People's Bank of China, moved to devalue the renminbi (yuan) by about 2 percent against the U.S. dollar, its steepest drop since China introduced its modern foreign-exchange system in 1994. A weaker currency should boost China's exports, at a time when Beijing is worried about slow economic growth amid lackluster domestic demand, a deflating real estate market, and sinking stock markets. The devaluation follows a decade in which the renminbi strengthened about 33 percent against the dollar.
Although China's central bank and political leadership acted for domestic reasons, the move will almost certainly cause ripples in Washington, where there was a general consensus that China's currency was already artificially weak (though not what to do about it), and on the campaign trail. "It's going to be a headache," says Conference Board economist Andrew Polk. "Donald Trump is going to have a field day with this."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
-
July 13 editorial cartoonsCartoons Sunday's political cartoons include new TSA rules, FEMA cuts, and Volodymyr Zelenskyy complimenting Donald Trump's new wardrobe
-
5 weather-beaten cartoons about the Texas floodsCartoons Artists take on funding cuts, politicizing tragedy, and more
-
What has the Dalai Lama achieved?The Explainer Tibet’s exiled spiritual leader has just turned 90, and he has been clarifying his reincarnation plans
-
Dollar faces historic slump as stocks hit new highSpeed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year
-
Economists fear US inflation data less reliablespeed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
-
Crypto firm Coinbase hacked, faces SEC scrutinySpeed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress codespeed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
Warren Buffet announces surprise retirementspeed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff displaySpeed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Markets notch worst quarter in years as new tariffs loomSpeed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panelsSpeed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
