By Gram Slattery

WASHINGTON (Reuters) -A top trade adviser to President-elect Donald Trump told Reuters on Thursday that the new administration would not look "fondly" on any attempt by China to manipulate its currency, responding to a Reuters report that authorities there were considering allowing the yuan to weaken next year.

Peter Navarro, Trump's incoming senior counselor for trade and manufacturing, said the White House would not interfere with the Treasury Department's biannual review looking into whether foreign trade partners are manipulating their currencies.

He added, however: "I don't believe the Trump Treasury Department would welcome Chinese currency manipulation very fondly. The history of China as a currency manipulator is well-known."

The Chinese embassy in Washington, reached for comment, said Navarro's statements "have no factual basis" and that the nation is not a currency manipulator.

"As a responsible major country, China has reiterated on many occasions that it will not engage in competitive currency depreciation," the embassy said.

Trump's administration labeled China a currency manipulator in 2019, the first time the U.S. government made that determination since 1994. The determination was revoked the subsequent year.

The move is more symbolic than substantive, but would nonetheless signal that Trump is willing to engage in an unprecedented trade war with China, the world's No. 2 economy, as he frequently threatened to do on the campaign trail.

The 2019 Treasury determination followed a period in which the Chinese government allowed the value of its currency to fall against the dollar.

On Wednesday, Reuters reported that China's top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher U.S. trade tariffs when Trump returns to the White House next month.

The contemplated move reflects China's recognition that it needs bigger economic stimulus to combat Trump's threats of punitive trade measures, Reuters reported. Trump has said he plans to impose a 10% universal import tariff, and a 60% tariff on Chinese imports into the United States.

Navarro, who also served as an economic adviser during Trump's first term, said Trump could choose to escalate tariffs even further if China weakens its currency, rather than waiting for the biannual Treasury report.

"There's appropriate remedies there," Navarro said. "If (Trump) didn't want to wait for any report, he could just raise tariffs higher."