Major investment consultants around the world predict that Trump’s tariff sanctions will cause the offshore yuan to depreciate to a record low

According to the CNBC report, the Chinese authorities are struggling with the problem of the offshore renminbi's depreciation, and all major investment banks and research institutions forecast that the renminbi will depreciate to a record low. It is expected that after Trump takes office next year, he will immediately implement tariff sanctions, further increasing the pressure on the People's Bank of China. Summarizing the forecasts of thirteen investment banks and research institutions, by the end of 2025, the exchange rate of the US dollar to the renminbi will reach at least 1:7.51 (US dollar:renminbi). In his post on the social media platform Truth Social, Trump revealed that he will impose an additional 10% "supplementary tariff" on all Chinese goods entering the United States. Trump's post states: "I have had many discussions with China regarding the massive flow of deadly drugs (especially fentanyl) into the United States, but to no avail. Chinese representatives told me that they would impose the death penalty on drug dealers, but unfortunately they have never carried it out. Drugs are pouring into the US through Mexico like never before, and we will impose an additional 10% tariff on all the many products coming into our Country from China." During the election campaign, Trump promised voters that he would impose a 60% or higher tariff on Chinese goods. 60% plus 10% is 70%, so Trump will impose severe sanctions amounting to a 70% tariff on China. Capital Economics economist Jonas Goltermann pointed out that, other things being equal, tariff sanctions will lead to a appreciation of the US dollar, and the currencies of economies closely linked to trade with the US will face the greatest depreciation pressure. Barclays Asia FX and Emerging Markets Macro Strategist Mitul Kotecha even further expanded the forecast, stating that if a tariff of over 60% is imposed on all Chinese goods, the exchange rate of the US dollar to the renminbi could depreciate to 1:8.42, compared to the current rate of 1:7.25 (US dollar:renminbi). Reuters reported in the past that when Trump was US President in 2018, the first round of tariffs on Chinese goods led to a depreciation of the renminbi of about 5%, and the following year, the renminbi depreciated another 1.5% as trade tensions escalated. BNP Paribas Greater China FX and Rates Strategist Wang Ju said that given the scale of the tariff threat and the degree of US-China trade imbalance, the current economic uncertainty is far higher than during Trump's previous tenure as US President. He added that if there is a clear lack of consistency in the policy statements of the new US government, it will further exacerbate uncertainty, and he expects the People's Bank of China to take countercyclical measures to prevent the renminbi exchange rate from depreciating excessively. BMI Chief Economist Cedric Chehab said the renminbi-US dollar exchange rate has already approached the 7.3 US dollar level that the authorities have always tried to defend, and if this level is breached, it will increase the volatility of the Chinese financial market, which the People's Bank of China hopes to avoid. Chehab also pointed out that the challenge is that the People's Bank of China may be unwilling to raise interest rates to curb the depreciation of the renminbi, as this would further increase economic pressure. This year, the People's Bank of China has limited the daily reference exchange rate to 7.20 US dollars to maintain the onshore value of the renminbi. The Chinese authorities are facing the difficult challenge of protecting the renminbi from depreciation while also getting the Chinese economy back on track. A significant depreciation of the renminbi will exacerbate capital outflows and have a stronger impact on China's financial markets.