Yuan Hits 17-Year Low As U.S. Tariffs Take Effect

China’s yuan slumped to its lowest closing level in more than 17 years on Wednesday, rattled by an intensifying trade war between the world’s two largest economies. The offshore yuan briefly touched an all-time low overnight before recovering slightly, while Beijing’s state-owned banks scrambled to stabilize the currency.

The onshore yuan ended domestic trading at 7.3498 per dollar, its weakest finish since December 2007, as Washington’s aggressive new tariffs on Chinese goods officially came into force.

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The latest round of U.S. tariff hikes—including a staggering 104% duty on key Chinese exports—has put further pressure on the yuan. China’s top policymakers are set to convene as early as Wednesday to discuss new measures aimed at propping up the economy and shoring up financial markets, according to sources familiar with the matter.

Beijing Holds The Line

Despite the mounting tariff pressure, China’s central bank appears determined to prevent a sharp devaluation. Authorities have reportedly directed major state-owned banks to curb their dollar purchases, a move seen as an attempt to slow the yuan’s decline.

Analysts at Capital Economics warn that if these tariffs remain in place, Chinese exports to the U.S. could shrink by more than half over the next few years—even assuming the yuan weakens further to 8 per dollar. Such a scenario could shave 1-1.5% off China’s GDP, depending on whether exporters can reroute trade through third countries. Beijing is expected to counterbalance the economic impact with additional fiscal stimulus.

Market Intervention And Volatility

In a bid to steady the currency, the People’s Bank of China (PBOC) set its daily midpoint fixing at 7.2066 per dollar—the lowest since September 2023, but still significantly stronger than market expectations. This suggests that Chinese policymakers are reluctant to allow unchecked depreciation.

Major state-owned banks were actively selling dollars early Wednesday to slow the yuan’s decline, according to insiders. Despite these interventions, both the onshore and offshore yuan have fallen more than 1% this month, continuing their downward trajectory for the year.

Adding fuel to the fire, former U.S. President Donald Trump accused China of currency manipulation, claiming it was deliberately weakening the yuan to offset tariff costs. While a weaker yuan could make Chinese exports more competitive, a sharp drop also raises the risk of capital flight and financial instability—concerns that Beijing is keen to avoid.

For now, all eyes remain on China’s next move as it navigates a high-stakes economic standoff.

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EU Mercosur Agreement Sparks Political Battle Over Cyprus Agriculture

by THEFUTURE.TEAM

January 16, 2026

A political battleground emerged in the Parliamentary Agriculture Committee’s latest session, as fierce debates broke out over the controversial trade deal between the European Union and Latin American nations under the Mercosur framework. Lawmakers voiced deep concerns regarding food safety and the prospects for local agriculture, particularly following the high-profile absence of the Minister of Trade.

Minister Absence And Parliamentary Integrity

Committee Chair Giannakis Gabriel expressed strong disapproval over the Minister’s no-show, noting that the extraordinary session was scheduled at midday at the Minister’s own request. “His absence undermines the authority of the parliament,” Mr. Gabriel declared. Given that the Minister is not abroad, it was expected that he would be present to clarify why Cyprus supported an agreement widely criticized as disadvantaging the agricultural sector.

Trade Deal Under Scrutiny

In his address, A.C.E.L General Secretary Stefanos Stefanos described the pact as a “dangerous agreement” imposed under the pressure of multinational conglomerates. He especially critiqued the contrasting sanitary standards whereby, while the EU bans our farmers from using certain pesticides and antibiotics, the Mercosur deal appears to allow imports produced with these very substances. His remarks underscored the possibility of double standards in safety measures and the potential long-term impacts on Cypriot agriculture.

Economic And Safety Concerns

Legislators questioned the basis of government studies that justified backing the agreement, even as Cyprus’ agricultural sustainability is increasingly threatened by water scarcity and soaring production costs. Representatives from various political factions pointed to insufficient controls over import volumes and tariff structures. For example, Christos Orphanidis (DIKO) demanded precise data on imports from Latin America, citing honey as a case in point, and pressed for clear explanations regarding the tariff regime.

Legal And Health Implications

Questions about legal authority were raised by Elias Myriantounos (EDEK), who inquired whether parliament can reject or amend the agreement should economic studies forecast negative outcomes. Environmental advocates, like Haralambos Theopemptou of the Movement of Ecologists, emphasized the need to safeguard traditional products such as halloumi, highlighting concerns over how rigorous food safety controls will be maintained. Meanwhile, Linos Papagiannis (ELAM) cautioned against unfair competition, drawing parallels with challenges posed by lower-standard goods from occupied territories.

Protecting Local Interests

The overarching message from lawmakers was clear: the future of Cyprus’ farming community and the well-being of its citizens should not be sacrificed at the altar of commercial trade. Agricultural organizations have voiced alarm over the importation of goods potentially contaminated with banned substances, the risk of market distortion by low-quality products, and the lack of localized impact studies. They argue that the agreement is biased in favor of select corporate interests, ultimately undermining consumer safety and the livelihood of European farmers.

As this debate continues to unfold, the outcome of these deliberations will be pivotal in determining not only trade policy but also the long-term economic and food security landscape of Cyprus.