Neighbouring countries consider currency revaluations in trade negotiations with Trump

From Yahoo Finance: 2025-05-16 02:33:00

As the currencies of South Korea, Taiwan, and Japan strengthen, speculation arises about potential revaluation in trade talks with U.S. President Trump. Market shifts follow discussions between officials, with Korea and Taiwan experiencing significant currency surges. The looming threat of reciprocal tariffs from Trump adds urgency for export-dependent Asian economies to negotiate favorable terms.

Asian economies like Japan, Korea, and Taiwan face the risk of being displaced in global supply chains as China and India accelerate negotiations with Trump. These countries, along with others like Singapore and Vietnam, are on the U.S. Treasury’s currency monitoring list. The possibility of revaluing currencies as a bargaining chip in trade negotiations is gaining traction.

Amidst calls for currency revaluation to appease U.S. demands, concerns arise about the economic risks and market instability this strategy may pose. Analysts argue that most Asian currencies are undervalued, but appreciating them could worsen disinflation and deflation. The complex nature of currency manipulation and the challenges of implementing a comprehensive accord make the path forward uncertain.



Read more at Yahoo Finance: Analysis-Why China’s neighbours may want currency deals with Trump