Will China Use Treasury Holdings to Retaliate?

The Week Ahead

March 12, 2018

So far, the focus has been on NAFTA with the US Administration being relatively soft on China. New tariffs on steel and aluminum are a far cry from the broad-based 45% tariff promised by President Trump during the campaign. Yes, China is the largest steel producer in the world, but with an only 2% share of US steel imports, it’s hardly a dominant player in that space.

And Trump has many reasons not to push the envelope on China. A large broad-based tariff will be translated immediately into higher prices at Walmart—hurting mostly low-income Americans—many of whom make up his base.

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