China’s Communist Party publicly talking about an American default is… essentially a declaration of intent to destroy the American economy. Washington should fight back.
No amount of persuading, cajoling or badgering has worked to convince China to accept agreements and norms.
Trump can hasten the departure of businesses from Chinese soil with tariffs and administrative measures restricting international commerce. The loss of access to the U.S. market would shake China. Last year, China’s merchandise trade surplus against America amounted to 81.8% of its overall merchandise trade surplus, showing extreme dependence on the American market…. Trump can also order American companies to end their technical cooperation agreements with Chinese entities, prohibit portfolio investments in Chinese markets, and end all sales of tech products.
China may not recover from such actions. Case in point: There is now talk that Huawei Technologies, which six months ago looked as if it would take over the world’s 5G networks, may go out of business because it is having difficulty buying chips to install in equipment
Many Americans have been intimidated, saying Washington cannot oppose China because it owns Treasury debt. That is a hollow threat… The net result of China carrying through on its threat is to leave U.S. Treasury obligations in the hands of countries far more friendly to the United States.
More important, the paper suggested the United States might for the first time ever default on its debt obligations.
China is certainly trying to destabilize the United States, and it looks as if it’s about to declare total economic war on America.
Beijing has tipped its hand. The question for the Trump administration, therefore, is whether America should strike first.
Yes, it should, and Washington should hit Beijing as hard as it can. A vicious attack merits an overwhelming response.