While China could offset American tariffs by letting its currency fall, that might endanger Beijing’s recent efforts to stabilize the economy.

Chinese companies’ foreign-currency debt load has shrunk significantly, reducing a key source of vulnerability as the yuan faces growing uncertainties under Donald Trump’s second presidency.

The yuan fell against the U.S. dollar to its weakest level in nearly four months after U.S. President-elect Donald Trump said he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.

The Chinese yuan fell to its weakest level against the US dollar in nearly four months following statements by US President-elect Donald Trump regarding significant tariff increases on imports from China,