Quick Note: China Dumping US Securities

 

China used to buy US debt to prop-up the US dollar so that the USA could purchase Chinese-made goods.  Then, as Trump and Biden began to put sanctions and import limits and stuff on China, they CCP began to look for alternative markets and even began to attempt to grow their domestic market.  Now, having lowered their exposure to US trade retaliation, China is also lowering its exposure to US financial shenanigans.  It has been dumping US securities increasingly over the past couple of years.

Impact on the dollar and markets

A China has been rapidly selling off US Treasuries in a context where the American economy is already facing persistent inflation and high interest rates. The reduced demand for these securities puts upward pressure on interest rates and makes debt financing more expensive.

The dollar, which has already lost about 10% of its value against other strong currencies, is likely to weaken further if this trend continues. This decline, while potentially beneficial to American exporters, increases import costs and reduces international confidence in the currency.

Political context and effect on Trump

The Trump administration, pressured by low approval ratings and external crises, sees the Chinese move as part of a broader strategic dispute. The high tariffs imposed on Beijing have reduced bilateral trade by up to 40% in some sectors, but they have also reduced the inflow of dollars into China, altering global financial flows.

Experts consulted by Financial Times They believe Trump is seeking to offset his loss of influence with high-profile bilateral agreements, such as the one signed with Japan, which includes aircraft purchases and increased agricultural imports. However, critics say this strategy could further isolate the US in the long run.

Inflation is set to increase in the USA thanks to Trump's blithering.  Thanks to bipartisan austerity and corruption and incompetence and greed the US-American working class will likely curtail its spending significantly, thereby further cratering the economy.

In Canada, housing starts are much lower.  We are going to be impacted by Trump's tariffs. And, so far, the response of the genocide-enabling Liberals to Trump's madness is to attempt to quash the Treaty rights of the First Nations, militarize the border, and [insanely] commit to making military spending [on US-American made weapons] 5% of GDP.  

Carney is a traditional neoliberal.  He serves the corrupt, lazy, stupid, selfish, short-sighted Canadian oligarchy: Our coddled banks, communications, resource-sector buffoons.  The Rogers, the Westons, etc.  He and his government are incapable of rising to the moment and creating an autonomous, properous Canada.