Supply Chain

The Peso, the Yuan, and Your Sourcing Decision: Put Currency Beside the Tariff

Tariffs and currency affect different parts of a landed-cost model. Compare both sensitivities on the same customs-value base instead of assuming either one dominates.

Tariff-rate changes are discrete policy events and then apply to covered entries until policy changes again. Currency moves continuously and affects a foreign-currency quote between pricing and payment. As of Sep 18, 2026, the peso trades at 17.2454 per dollar (with no prior-year reading archived yet), the yuan at 6.6975 (with no prior-year reading archived yet), and the Canadian dollar at 1.4008 (with no prior-year reading archived yet). Those rates can reprice North American and China sourcing even while the tariff schedule is unchanged, but the effect depends on invoice currency and contract terms.

How to compare currency and duty on one base

Put both sensitivities on the same customs-value base. A tariff-rate increase adds the stated percentage points to covered entries, subject to classification and origin. An adverse currency move changes the dollar cost of the foreign-currency portion of the quote and can also change the customs value on which ad valorem duty is assessed. Neither effect is universally larger: a 5% currency move does not "beat" a 25% tariff on the same base, while a large currency move can matter more than a small duty change. Invoice currency, hedges, and pass-through clauses determine the result for a real contract.

A tariff announces itself. A currency move just shows up in the numbers, contract after contract, until someone finally checks the exchange rate they assumed two years ago.

Stress-testing a quote against the currency

The discipline is simple and rarely practiced: before signing a cross-border supply agreement, run the landed cost at the current rate and then at plus and minus 10% on the sourcing currency. If a 10% adverse move erases the deal's advantage, the sourcing decision is really a currency bet in disguise, and it should either be hedged, priced with a currency-adjustment clause, or reconsidered in favor of a source in your own currency. The three series here are the live inputs for that stress test, and they update as the market does, so the test can be rerun whenever a decision comes back to life.

The yuan's six-year path

Across the five-year record the yuan is still working down from a peak rather than building a new level. The high came at the close of 2024 near 7.2993, and today's 6.6975 sits 8% below it, the lowest since July 8, 2022. That gap is the fact worth carrying, because the reference point most people hold in their heads is the peak, and the record has spent years saying the peak was the anomaly.

Use the nearshoring landed cost calculator to rerun a sourcing decision at today's exchange rates and a plus-or-minus currency band. Stress-test the source

Published 2026-08-05.