China Doesn't Know What to Do With Trump

[BeatMan]

China is currently the second largest holder of U.S. national debt ($749 billion in Treasury bonds) by a foreign nation. China invests that money in U.S. bonds to help keep its export prices low. It focuses on export-led growth to help generate local jobs.



With billions of U.S. dollars, China has found the U.S. Treasury securities to offer the safest investment destination for the Chinese Forex (where banks, businesses, governments, and investors buy and sell currencies) reserves. It receives dollars from Chinese companies (exporters) that accept dollars as payments for their exports. These exporters require yuans to pay their workers, so they sell the dollars to the People's Bank of China (PBoC) for the needed yuans. This increases the amount of dollars available to buy more bonds and increases the value of the yuan which can be spent on China's military.

The PBoC actively intervenes to prevent a dollar to yuan imbalance in local markets. It buys the excess dollars from the exporters and gives them the required yuans. The PBoC can print yuans if more are needed. Effectively, this intervention by the PBOC creates a scarcity of U.S. dollars, which keeps the dollar rates higher.

https://www.americanthinker.com/articles/2025/04/china_doesn_t_know_what_to_do_with_trump.html

 

[Hel_Books]

Perhaps the Chinese are following the maxim attributed to Napoleon:

"Never interrupt your enemy when he is making a mistake."

 

[Politruk]

The culture that invented the death of a thousand cuts doesn't know what to do with Trump?!

 

[RobDownSouth]

Found out yesterday that China has "paused" ALL beef and chicken imports from the US. China offered a "sweetheart deal" to Australia to become its major beef supplier in place of American cattleman if Oz will set export prices in tandem with Chinese price swings. Australia said no thank you (it would require major increases in their cattle herd sizes with no long term guarantee.

I read that China has enough imported beef in their supply chain (called, quaintly, "on the water") until May 27th. The Chinese announced this week that going forward they'd source half their imported beef from Brazil and half from Australia.

Beef futures are literally all over the map because no one has ever experienced market conditions like this...the nearest thing was Trump's botched Covid handling, but export beef future prices have their widest spread ever, indicating a clear split in the belief that this will either A ) soon revert back to "business as usual" or B ) this is the "new normal".

And Orange Julius Caesar is quickly finding out that he cannot dictate trade agreements between two other countries, despite his thundering "there will be REPERCUSSIONS, dammit!" rhetoric.

And just about everyone is trotting out the Chinese axiom "may you live in interesting times".

 

[Hel_Books]

I'm thinking the countries of the world that are NOT China or the USA will try to adjust their supply chains so as not to include either, and avoid becoming dependent on them as export markets too.