(April 5): The US and China could negotiate a deal to strengthen the yuan in exchange for an easing of tariffs, according to Ray Dalio, founder of Bridgewater Associates, who recently met with senior Chinese leaders.

“I can imagine negotiations taking place over a China-US deal to strengthen China’s RMB relative to the USD in exchange for some trade relief,” Dalio wrote in a social media post on X on Friday. RMB is short for renminbi, the Chinese currency.

“If that were to happen, it would be more deflationary and depressing for China, which in turn would need to lead to an easier monetary and/or fiscal policy,” Dalio added.

The comments come after Dalio met with Chinese officials, including Vice Premier He Lifeng, central bank governor Pan Gongsheng, and Minister of Commerce Wang Wentao.

On Friday, China said it will slap a 34% tariff on all imports from the US, matching the level of so-called reciprocal tariffs imposed on Chinese products announced earlier this week. President Donald Trump blasted China’s retaliation against his sweeping tariff plan and vowed his economic policies “will never change”.

The yuan was little changed this week after the Chinese central bank supported the currency by setting stronger-than-expected daily reference rates.

Chinese officials have historically been reluctant to let the yuan strengthen too much. They view the Japanese yen’s appreciation following the Plaza Accord in the 1980s as contributing to the so-called “lost decade” in Japan.

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