The Chinese yuan is shrugging off a report that President-Elect Joe Biden would not immediately remove the higher tariffs placed on the world’s second-largest economy. The yuan, which has been one of the top-performing currencies in foreign exchange markets, maintained its upward trajectory as it looks to test 6.5 against its US peer.
Speaking in an interview with The New York Times, Biden revealed that he would not immediately eliminate President Donald Trump‘s elevated tariffs on Beijing. Biden will first review the present US-China trade agreement in order to establish a “coherent strategy” among allies in Europe and Asia.
The best China strategy, I think, is one which gets every one of our â or at least what used to be our â allies on the same page. Itâs going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.
Biden added that he wants to come up with a domestic bipartisan mechanism to gain “leverage” over China.
I want to make sure weâre going to fight like hell by investing in America first. Iâm not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers.
In January, President Trump signed a phase one trade agreement with Beijing. The pact temporarily removed tariff hikes, but it did not get rid of earlier increases in levies during the 18-month trade war.
Biden’s comments come soon after the Trump administration unveiled an executive order that prohibited US investments in Chinese companies with ties to the military. The president has also reportedly blacklisted several Chinese firms, including Semiconductor Manufacturing International Corporation (SMIC) and China National Offshore Oil Corporation (CNOOC).
Meanwhile, the yuan has been booming since bottoming out at around 7.1780 against the US dollar. Year-to-date, the yuan has risen close to 6%, with most of those gains occurring since August. Investors are bullish on the substantial rebound in the worldâs second-largest economy â China will be one of the few major markets to report annual growth in the gross domestic product (GDP).
Earlier this week, the National Bureau of Statistics (NBS) reported that the manufacturing purchasing managers’ index (PMI) came in at 52.1 in November, and the non-manufacturing PMI rose to 56.4. The private-sector Caixin manufacturing PMI surged to 54.9.
The USD/CNY currency pair fell 0.13% to 6.5636, from an opening of 6.5723, at 16:33 GMT on Wednesday. The EUR/CNY edged up 0.03% to 7.9361, from an opening of 7.9324.
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