China’s ‘self-destructive nuclear option’ in trade war: Selling US Treasury bonds
Included in China’s Twitter response to U.S. tariffs being increased on products originating in China, the threat of China selling U.S. Treasury bonds was explicitly called out a viable response option. Other responses included introducing tariffs on U.S. exports to China. Long considered a risk to the U.S. economy, this CNBC article takes a detailed look at what would happen in China engaged in this “nuclear” option.
“Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy.”