At a campaign event in 2015, Donald Trump once said: “I beat the people from China, I win against China. You can win against China if you’re smart.” One could argue, we've done that for years given how much money is owned by the US to the Chinese and why we should tread lightly in how we handle economic procedures with them.
With the planned tariffs on steel and aluminum imported to the United States, China has not been able to get off that list of exempt countries and this will likely create a huge problem. Trump has called China "an economic enemy," with as much as $60 billion worth of goods from the Asian powerhouse being taxed. A novel notion to "punish" them for technology trademark violations, but kind of a dumb move to light a fire under those who you own trillions of dollars to.
It's like walking into a bank where you owe almost as much as your annual salary only to tell them that from now on you want to get paid every time you make a payment to them. Make sense?
The infographic from Statista highlights this point. Data from the U.S. Treasury notes that China has quite a lot of financial leverage over the United States as the single largest owner of US treasury bills. The Chinese hold about $1.7 trillion of America debt, for about 18.7% of all of America's outstanding debt, while Japan is a close second at $1.25 trillion or 17.0% of the total. It's also amazing to see the year-over-year jump from 2017 to 2018 which suggests that China likely saw the writing on the wall and, unlike many others, took Tump at his word a year in advance and acted accordingly. Who wouldn't try to acquire a little more security (or securities, for this matter) faced with repeated highly critical comments by presidential candidate and president Trump?
The Chinese certainly aren't "stupid" and "winning" against them is rather moot at this point given how much economic leverage they now have over us. The lesson here? Don't give away economic plans to foreign economies on the campaign trail.
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