European manufacturers are raising concerns about what they perceive as currency manipulation giving Chinese exporters an unfair edge in global markets. The renminbi's valuation has become a flashpoint in trade tensions, with EU business groups arguing the currency remains artificially suppressed despite China's economic scale.

This isn't just corporate whining—there's real data behind the frustration. When a major economy's currency trades below its purchasing power parity for extended periods, it effectively subsidizes exports while taxing imports. For European firms competing in third markets or defending home turf, this creates a persistent headwind that tariffs alone can't offset.

The timing matters too. As manufacturing relocates and supply chains fragment, currency valuation becomes a critical variable in location decisions. A weaker renminbi amplifies China's already formidable cost advantages in sectors from EVs to solar panels, forcing competitors to either absorb margin compression or cede market share.

What makes this particularly interesting for macro observers: central bank digital currencies and cross-border payment innovations could eventually reduce the effectiveness of traditional currency interventions. But we're not there yet, and conventional FX dynamics still dominate trade competitiveness.