The $1.2 trillion weapon China could use in a trade war with the US

[Yo_Mama_Been_Loggin]

As the United States and China inch closer to a full-fledged trade war, economists and investors worry about worst-case scenarios that could impact the global economy — and America.

The war of words keeps getting harsher. China announced Wednesday that it may put tariffs on $50 billion worth of U.S. goods in retaliation against the Trump administration's plan for imposing 25 percent duties on Chinese imports. Markets were sent spinning, falling by more than 1 percent and then rebounding later in the day, while everyone is now wondering what might come next.

If this trade fight does escalate, then more tariffs could be slapped on more goods. But China could fire back in a far more significant way: selling a large chunk of the $1.17 trillion of U.S. treasury bonds it holds.

Over the last several years, China has bought scores of treasury bonds partly because it has U.S. dollars it needs to spend. Just like any investor, China wants to put some of the greenbacks it's made off its exports to the United States into safe investments, and there's nothing safer than U.S. bonds.

https://www.msn.com/en-us/money/markets/the-dollar12-trillion-weapon-china-could-use-in-a-trade-war-with-the-us/ar-AAvvKHL?li=BBnb7Kz

The Chinese are playing 3D chess while Trump plays tiddlywinks.

[lapfog_1]

1. This is the real concern

if they start unloading T-bills... yields will fall and others (Europe, Japan) may also start unloading just not to be the last one left at the "dine and dash" table.

The US will have to raise interest rates sharply to attract other investors... major recession.

Not to mention that, unlike China, we have been living on credit so much that any move anywhere is a real problem. What we needed was HIGHER taxes coupled with targeted tax cuts and at least 3 decades of slow and steady growth with some debt paydown. Just like where we were headed in the last 2 years of the Clinton Administration. Then came Bush 2 and the crash and a very slow recovery... but not back to where we were at the end of Clinton.

[roamer65]

2. The Federal Reserve will buy up any Treasury paper dumped by the Chinese.

They have already been doing it under the guise of QE. The Chinese have been silently unloading Treasury paper.

Be more concerned of a embargo of export of their rare earth metals.

[Major Nikon]

3. I dont see them using that strategy intentionally

Ultimately it would hurt them more than it does us. We should be more afraid of them being forced to sell those bonds because they need the liquidity.

[KT2000]

4. and what about the fact

that they have the plans/diagrams etc. for all the goods manufactured in China by foreign companies. If they quit sending TV's there will be riots in the street. They nationalized US businesses in China before and they could do it again if this goes on for long.

[Stuart G]

5. I don't think has a clue as to what 3D chess is.

I think Trump is lost somewhere back at square number 1..in some ancient board game for kids.. That game is called................CANDYLAND........
....................He thinks he can win cause he thinks he is smarter than Chinese Leaders..

Trump ain't ..smarter than the leaders of the.... Antarctic Penquin Association...

Trump don't know ....yes, the Chinese Government could sell..guess what??

U.S. Government Bonds......no not savings bonds.....the other kind....
....you know, the bonds that you buy from the Federal Reserve Bank?..30 Year Bonds are available to everyone with enough real money to buy them. The "30 Year Bond" is considered the safest investment in the entire world... You can set up an account with the Federal Reserve Bank, by investing and buying a bond..with a certified cashiers check....(can't be a fake check..got to be real money)
....Now the government in China has some money, and so do some other governments. Some very rich people have ...30 year Bonds...Some average people have them too..Trump may have a few...but I don't think he knows it...not smart enough to handle the money.........So China has a lot of money invested in the U.S.Bonds...30 Year Bonds.. the best investment in the whole world...and if they sell all of them at once....???????????????????????????????????????????.....Not a good idea.......no sir .....would they do that???

In a trade war with Mr Drump?...the village idiot??? maybe...