US trade officials will announce a major trade enforcement action against China on Tuesday, according to an advisory from the US Trade Representative's office. The advisory, which was obtained from a business group, said US Trade Representative Ron Kirk "will hold a press conference to announce a major trade enforcement action against China." It gave no other details. http://economictimes.indiatimes.com...e-enforcement-action/articleshow/10050366.cms
Biting the hand that feeds you (in terms of T-Bonds) is always smart. Rare earth(s) is a miniscule proportion of trade but..........the gesture could have ramifications.
China has actually increased its t-bond holdings over the past two years so I am not sure where the logic in this lies. http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
I don't think you understand how this stuff works. First of all, if I owe you $2 trillion and there's no government, no police to make sure I pay - only my promise - who has more power in the relationship? Second, China is forced to buy Treasuries so long as they want to hold down the Yuan and run a trade surplus. We'd be overjoyed if they were to discontinue those policies. Third, who loses more from a trade war? China - a goods exporting nation - or America, which isn't dependent on trade, exports little, and currently "imports unemployment" from Asian currency manipulators?
Interesting. Is this the case? To be sure, both countries would experience adverse effects, and the reverberations would be felt throughout the world. However, which country would still be standing in the end to pick up the pieces...at a discount?