Why not weaponise US Treasury holdings against Trump tariffs?
Instead of retaliatory tariffs, countries should respond to US tariffs by selling off their holdings of US Treasuries. This approach, unlike imposing reciprocal tariffs, would avoid reducing growth, raising inflation, and burdening domestic households and businesses. By targeting US bond market stability, this strategy could also gain the attention of policymakers who may be less responsive to arguments about the disruptive and costly nature of tariffs.
Central banks collectively hold a significant amount of US Treasuries, totaling around US$3.8 trillion, making the threat of selling a meaningful one. For example, if the US imposes tariffs on a country, that country could announce its intention to sell a proportionate amount of its US Treasury holdings and reinvest the funds in other assets. This approach would have no direct impact on growth or inflation, potentially leading to fewer negative effects on domestic economies compared to imposing tariffs.
via SCMP Full Text Feed
Instead of retaliatory tariffs, countries should respond to US tariffs by selling off their holdings of US Treasuries. This approach, unlike imposing reciprocal tariffs, would avoid reducing growth, raising inflation, and burdening domestic households and businesses. By targeting US bond market stability, this strategy could also gain the attention of policymakers who may be less responsive to arguments about the disruptive and costly nature of tariffs.
Central banks collectively hold a significant amount of US Treasuries, totaling around US$3.8 trillion, making the threat of selling a meaningful one. For example, if the US imposes tariffs on a country, that country could announce its intention to sell a proportionate amount of its US Treasury holdings and reinvest the funds in other assets. This approach would have no direct impact on growth or inflation, potentially leading to fewer negative effects on domestic economies compared to imposing tariffs.
via SCMP Full Text Feed
