The Chinese authorities are facing new tariff threats from US President-elect Donald Trump and are strengthening control over the yuan exchange rate. Immediately after the end of the US elections, the People's Bank of China began to set the daily reference rate of the yuan above 7.2 per dollar, despite dollar fluctuations and analysts' expectations that the central bank would weaken the currency. Such actions by the central bank are reminiscent of the tensions that characterized Trump's first term, but now the stakes are even higher. China is balancing between the desire to protect its currency and the need to stimulate economic growth. This forces the central bank to seek a balance between too strong and too weak yuan exchange rate. Experts believe that the People's Bank of China will keep the yuan relatively stable against the dollar, as it was before. In response to the imposition of additional tariffs, China will rely more on domestic incentives rather than currency devaluation.
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