Bessent Suggests Acceptance of Yuan Exchange Rate Versus Dollar
US Treasury Secretary Scott Bessent suggested he’s fine with how China’s yuan has moved against the dollar this year, while pointing out its depreciation against the euro presents a challenge for European economies.
“Well, they haven’t done it to the US,” Bessent said of descriptions of China having engaged in “ ” this year. “The RMB is actually stronger this year versus the dollar,” he said, referring to the renminbi, China’s official name for its currency. “It’s at an all-time low versus the euro, which is a problem for the Europeans.”
The yuan is up about 3% so far this year against the dollar — roughly half the appreciation of South Korea’s won or Japan’s yen, according to data compiled by Bloomberg. The euro has soared almost 14% against the dollar in that time. Because it’s risen by less against the dollar, the yuan has dropped versus other major currencies. It’s dropped about 10% versus the euro.
“Chinese trade with Europe is up 6.9%, and it’s down 14% with the US,” Bessent said during an interview in Madrid following talks with his Chinese counterparts on trade and TikTok earlier this week. “We’re coming into balance. Our trade deficit with China this year will probably be 30% lower.”
Earlier this year, the Treasury Department in its semiannual analysis of trading partners’ currency policies singled China out for “its lack of transparency,” something it’s done for years. But it stopped short of naming any economy for manipulating its exchange rate.
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Bessent also said he was confident that the Supreme Court would rule in the administration’s favor on President Donald Trump ’s use of emergency authorities to impose tariffs on a wide range of countries.
He said that the tariff revenue, which is helping to stabilize US debt, is “all extra” and that the administration can achieve its goal of bringing the deficit-to-GDP ratio down to something “with a three in front of it” by the time Trump leaves office.
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If the Supreme Court rules against the tariffs, Bessent said that the administration has other authorities it can use to replicate the same effect, and that countries that have struck trade deals with Washington based on seeking relief from higher tariff rates should “stick with it.”
“Those of you who’ve gotten a good deal should stick with it,” he said. “You should assume that they’re here to stay and that you should honor your agreements.”