Economics
China Armed With Powerful Market Weapons in Duel With Trump
- Currencies, Treasuries and soybeans are seen as cudgels
- Yuan and beans have fallen, but bonds have remained buoyant
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China has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost.
Beijing said it will be forced to retaliate -- but didn’t specify how -- after U.S. President Donald Trump followed through with his threat to raise tariffs Friday on $200 billion of Chinese imports to 25% from 10% percent. But simply responding with its own tit-for-tat tariffs isn’t China’s most likely move, said Brad Setser, a former Treasury official who’s now a senior fellow for international economics at the Council on Foreign Relations.