Author Topic: China’s $1.2 trillion weapon that could be used in a trade war with the US  (Read 1736 times)

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China’s $1.2 trillion weapon that could be used in a trade war with the US
PUBLISHED THU, APR 5 201811:06 AM EDTUPDATED FRI, APR 6 20188:32 AM EDT
Bryan Borzykowski
@BBORZYKO

https://www.cnbc.com/2018/04/05/chinas-1-point-2-trillion-weapon-that-could-be-used-in-a-us-trade-war.html

KEY POINTS

China holds $1.17 trillion of U.S. government debt.

Economists and investors worry if there is a trade war, China could reduce its U.S. debt holdings as a political weapon against the Trump administration tariffs proposal.

If that happens, the dollar could fall and other countries could follow suit and sell their holdings.

If China reduces its buying at a time when the U.S. is increasing its supply of new Treasuries into the market, that could lead to a rout in the bond market.