The offshore yuan weakened to around 7.32 per dollar after China announced a package of tariffs on a range of products imported from the US, raising concerns about a deepening trade war between the world’s two largest economies.
Chinese yuan suffers for US tariffs on China
The move heightened market uncertainty, with investors bracing for further volatility in global trade and currency markets.
On Tuesday, China’s finance ministry stated it would impose an additional 15% tariff on coal and liquefied natural gas (LNG) imports from the US, along with a 10% levy on crude oil, farm equipment, and certain cars, effective February 10. This retaliatory measure follows the US’s implementation of a 10% tariff on Chinese exports starting today, intensifying tensions between Washington and Beijing.
Export controls on key strategic minerals
In addition to tariffs, China’s commerce ministry and customs officials announced export controls on key strategic minerals, including tungsten, tellurium, ruthenium, and molybdenum—materials essential for high-tech manufacturing, semiconductors, and defense applications. These restrictions are expected to impact global supply chains, potentially disrupting industries reliant on Chinese raw materials.
Trump postponed planned tariffs
Meanwhile, President Trump postponed planned tariffs on Mexico and Canada for a month after securing commitments to strengthen border security and take tougher measures against illegal immigration and drug smuggling. The temporary reprieve eased immediate trade concerns within North America, though broader geopolitical tensions continued to weigh on investor sentiment.
