China has already banned the export of rare metals to the USA.

New Delhi: Even before Donald Trump took office as president, China began sending messages to the country. The message is clear: it will not bow to America.

China has already banned the export of rare metals such as gallium, germanium and antimony to the US. These metals are extremely important to America’s engineering and defense industries. This is expected to cause the US a loss of more than $3 billion.

In addition, China has now prepared another cycle in response to Trump’s threat to increase tariffs. It’s not easy to break this cycle. In 2025, China is considering weakening the yuan. The devaluation of the yuan makes Chinese exports cheaper. This will reduce the impact of tariffs.

Trump has announced he will impose a 10% tariff on all imports and 60% on Chinese imports into the US. The devaluation of the yuan could make Chinese exports cheaper. This will reduce the impact of tariffs and loose monetary policy in China.

Reuters quoted sources as saying a devaluation of the yuan could be allowed next year. At a meeting of the Politburo, the decision-making body of Communist Party officials, this week China pledged to adopt a moderately loose monetary policy next year. This is the first such relaxation of its policy stance in almost 14 years.

Yuan policy has featured heavily in financial analyst notes and other think tank discussions this year. The People’s Bank of China (PBOC) has raised the possibility that the yuan could fall to 7.5 per dollar to counter any trade shocks. This is a decline of about 3.5% from the current level of 7.25.

The yuan weakened more than 12% against the dollar during tariff announcements between March 2018 and May 2020 during Trump’s first term as president. The yuan’s weakness could help the world’s second-largest economy. It reduces deflationary pressures by increasing export earnings and making imported goods more expensive.

Analysts forecast the yuan will fall to 7.37 per dollar on average by the end of next year. The currency has lost about 4% of its value against the dollar since the end of September.

When a country weakens its currency, it means that it is making other currencies more valuable than its currency. This will make this country’s exports cheaper and its imports more expensive. In the case of China, a weakening of the yuan will lower the prices of Chinese products in the global market. This will give them a competitive advantage. However, this makes imports more expensive and can lead to inflation.