FX.co ★ Offshore Yuan Retreats After China Hits Back with Tariffs

On Friday, the offshore yuan weakened to approximately 7.26 per dollar following a temporary rise to a two-week high earlier in the day. This fluctuation occurred subsequent to China revealing its decision to implement reciprocal tariffs on imports from the United States. According to the Customs Tariff Commission of the State Council, China plans to enforce an additional 34% tariff on all American products starting April 10, 2025. This decision came on the heels of President Trump's announcement of a parallel 34% tariff on Chinese imports on Wednesday, elevating the cumulative tariffs on Chinese goods to a substantial 54%. This development marks a historic increase in duties affecting nearly all Chinese exports, which could severely impact China's export volume to the US. Meanwhile, China also declared its intention to renew negotiations with the European Union, aiming to enhance collaborative efforts between Chinese and European businesses, particularly within the electric vehicle industry. Earlier in the week, South Korea, China, and Japan reached an agreement to work towards a free-trade agreement, with the objective of bolstering regional commerce.