China owns a lot of US debt. They could declare financial war.

[ProudMNDemocrat]

That is what Trump is basically saying. China could call in its debt and tell Trump to pay up. The Chinese hold the cards, not Trump.

Imagine what that would do to the world financial markets. Depression.

[stopdiggin]

1. Of course they could

well known and established financial reality long before Trump took office.
(The only tether here is China's own financial interest. And we don't need any additional clues as to who is doing "rational" behavior these days)

[ExciteBike66]

2. If you owe the bank $100 dollars, that's your problem...

if you owe the bank $100 million, that's the bank's problem -jp getty

[gibraltar72]

3. Or ours.

[Wellstone ruled]

4. Late last fall,

on a overnight Bloomberg,there was story after story about China preparing to unload US Treasuries. With in days the Virus hit,and this will once again happen.

[Voltaire2]

5. Why would China want to crash the value of its debt holdings?

Pleas elaborate.

[ProfessorGAC]

6. No They Won't

First we hold their notes as well, and while the dollar amount is lower than their paper, the % of their GDP they owe us is larger than the reverse.
Financial war is self-immolating for the Chinese government.
In addition, and extra 15-20% of their entire cash flow (velocity of money) is rooted in exports to the US.
As a fraction of total GDP, China needs us even more than we need them.

[soryang]

10. If you consider US corporate revenues inside China

...it's about even. While technically not a part of the trade balance, it will be just as damaging for US multinationals if their businesses are expropriated or shut down.

[ProfessorGAC]

15. I Didn't Say Otherwise

I said they need us MORE. I didn't say it would not be bad for us too.
It's a symbiotic relationship.
Last note: more than 60% of American firms operating in China are producing for the far east economies.
Sales at wholesale or retail end up right in that part of the world. 60+%.
The tech sector is an outlier given the % of products imported into the US.
The fear is a trade confrontation that goes past the line.
When symbionts have no interchange, there is nothing to lose.
Wars start that way.

[jmg257]

7. What if trump refuses to pay?

[SoonerPride]

9. well if the US defaults on debt then we become Venezuala in about 4 minutes.

Loaf of bread for $1400

Sounds fun doesn't it?

[usedtobedemgurl]

8. That is all thanks to Bushie

He sold off more debt than ever had been traditionally. Those wars were not going to finance themselves! At the time it was brought up the Chinese could take us to our knees without a single billet. Thanks, rethuglicans!!!

[muriel_volestrangler]

11. Government debt has set dates when it's payable

So "call in its debt" isn't accurate. What they could do is decide not to buy any new debt (which will be needed to replace the expiring debt, and to increase the total size, because all governments are now borrowing more); that might make others demand higher interest to buy it instead.

That would happen over a period of time; Trump probably couldn't give a shit by now, as long as he make it to November.

[roamer65]

12. If the Chinese dump it on the markets, the Federal Reserve will monetize all of it.

They’ll buy all of it.

Where you will eventually see the effect from the sale is in inflation.

[rockfordfile]

13. China is a problem just like Russia

[roamer65]

14. That's because they are allies in the Shanghai Cooperation Organization.

SCO.

http://eng.sectsco.org/for_media/20180606/441009.html