The article discusses the ongoing trade war between the US and China, highlighting that China holds nearly $760 billion in US debt. This positions China as the second-largest holder of US treasuries, creating potential leverage over the US dollar. President Trump has imposed tariffs up to 145% on Chinese goods, while China retaliates with 125% tariffs. With escalating tensions and accusations of WTO violations, experts warn that China could utilize its debt holdings to destabilize the dollar, significantly impacting global and domestic economies.
As the tariff barriers become so prohibitive that we are just no longer able to access each other's markets, the only source of escalation becomes kind of more escalating retaliatory tools, like selling off US debt for less than it is worth to devalue the dollar, said Alex Jacquez.
While Trump has paused tariffs on most countries for 90 days, China is not on that list, escalating tensions between the two countries.
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