China's big threat to retaliate against the US in the trade war would backfire catastrophically lopezlinette
While riding on his father's shoulders, a young Chinese boy aims his toy machine gun as they visit Tiananmen Gate on National Day in Beijing Sunday, October, 1.Now that the US trade war with China has begun, people on both sides are talking about the idea that China could retaliate against the US by selling Treasurys.Selling a meaningful amount of US Treasurys would have harmful reverberations on China's economy, not to mention the world's.
It sounds terrible. Luckily, it's highly unlikely to happen, because a Treasurys dump would hurt the US, China, and the world in that order. Selling US Treasurys would depress the value of the dollar, making Chinese exports more expensive. Plus, it would limit China's ability to manage its own currency, the yuan, if this trade war gets really out of control.
"What people don't understand is that it is not a choice" to keep so many Treasurys, Stephenson-Yang said, calling the dollar the world's"currency of choice." This, of course, does not stop China's media from bringing up the dumping of Treasurys to scare the US. Here's a tweet from the editor of the Chinese and English editions of The Global Times, a fairly bellicose Chinese state mouthpiece.On top of all that, dumping Treasurys in bulk would reverberate through China's economy, and the global economy, in ways that would cause extreme, and potentially uncontrollable volatility.
The very existence of the trade war has been weakening the yuan since its opening salvos last summer. In order to ensure that it doesn't fall too far and break the band, Chinese policymakers are selling Treasurys and related instruments.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Cramer Remix: China needs us more than we need ChinaJim Cramer explains how the United States has the upper hand in trade negotiations with our stronger, cash fueled economy.
Leer más »
US tariffs on China jump as deadline passes, China immediately says it will retaliateThe Trump administration is hiking duties on $200 billion worth of Chinese products to 25% from 10%.
Leer más »
As Trump fights with China over trade, U.S.-China economic relationship already being redefinedThe trend of U.S. companies serving Chinese consumers with products made in China could pose a significant challenge to Trump’s “America First” agenda
Leer más »
Treasury yields tick higher as investors monitor US-China tradeU.S. government debt prices were higher on Thursday morning, on the back of growing tensions between the U.S. and China.
Leer más »
Treasury yields tick lower as investors monitor US-China tradeU.S. government debt prices were higher on Tuesday morning, as investors monitored developments in U.S.-China trade.
Leer más »
Treasury yields tick higher as investors monitor US-China trade standoffU.S. government debt prices were lower on Wednesday morning, as investors monitored developments in U.S.-China trade talks.
Leer más »
Treasury yields move lower on US-China trade tensionsU.S. government debt prices were higher on Monday as concerns over the ongoing trade war between the U.S. and China took center stage.
Leer más »
Treasury yields slip after consumer inflation report, intensifying U.S.-China trade spatTreasury prices rise Friday, nudging yields lower, as a reading consumer inflation appeared to support buying of government paper, already drawing bids as...
Leer más »
Treasury yields move lower as increased tariffs on China kick inU.S. government debt prices were higher on Friday morning as U.S.-China trade tensions escalate further.
Leer más »
U.S. poised to double tariffs on $200 billion of Chinese imports, escalating U.S.-China trade warU.S. poised to more than double tariffs on $200 billion of Chinese imports, escalating trade war; talks expected to resume Friday
Leer más »
US-China trade talks break up after US raises tariffsTrade talks between the US and China end without a deal, but negotiators from both sides say they held 'constructive' talks that went 'fairly well' after the US raised tariffs on $200 billion in Chinese goods and Beijing promised to retaliate.
Leer más »