The Chinese currency jumped against the US dollar as trade war worries receded, but some fear the gains may be ‘short-lived’.

Trump said on Tuesday his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the US via Mexico and Canada. The offshore yuan eased around 0.2% on the news.

That’s because President Donald Trump said on Tuesday that a new 10% across-the-board tariff on Chinese goods could be enacted as soon as February 1. Unlike Mexico and Canada, which largely avoid tariffs on exports to the United States because of the current USMCA trade agreement which Trump signed in his first term,