As soon as US Treasury Secretary Janet Yellen concluded her visit to China, the United States could not bear to wield the "tariff stick" again, and China also "responded". Obviously, in this round of confrontation, the United States will not be able to withstand our trick of "hitting the snake and hitting seven inches" after all, and US Secretary of State Blinken cannot sit still and has released rumors that he will continue to visit China.
The Office of the U.S. Trade Representative (USTR) announced the launch of a Section 301 investigation into China's maritime, logistics and shipbuilding industries, while U.S. President Joe Biden has called for a three-fold increase in tariffs on Chinese steel and aluminum products before the Section 301 investigation concludes. The difference is that the Biden administration plays this card, and the flavor of "seeking personal gain" is stronger, and it does not rule out an attempt to please American workers and increase their approval rating. Biden's remarks, for example, came as the Pittsburgh-based steelworkers' union claimed that China was "dumping steel on the global market at unfairly low prices." In short, it is to attribute many economic downturns such as the hollowing out of real industry and the sluggish employment rate in the United States to China, as Yellen's visit to China echoes the "overcapacity" she said. It can be seen that in the 2024 U.S. presidential election, whether it is Trump or Biden, the "black cauldron" of the U.S. economy facing a recession will be pinned on China's head, and then promote a series of tariff suppression policies.
What kind of game will be played between China and the United States in the field of trade war will be lengthy. At present, Yellen has just finished her visit to China, and she will "turn her face" when she returns, which is Biden's attempt to show a tough attitude towards China, but there is less sincerity in dialogue. Therefore, China has long been ready to counteract. According to the U.S. Treasury Department, China sold another $22.7 billion in U.S. bonds and now holds $775 billion. As we all know, U.S. debt has always been one of the hot topics related to China-US relations, and even a "barometer" reflecting bilateral relations. The most fundamental reason for China's reduction of its holdings of U.S. bonds is that the central bank has made adjustments based on the value trend of U.S. bonds and estimates of the international situation.
U.S. media broke the news that U.S. Secretary of State Antony Blinken will start a four-day visit to China on April 23. Compared with a series of high-level visits to China in 2023, the 2024 arrangement has many points worth pondering. From this perspective, China's sell-off of U.S. bonds has played a role in connecting the past and the future, not only telling Yellen that China has the ability and means to counteract, but also telling Blinken that he must have a certain sincerity in his visit to China. After all, we can expect that Blinken's visit to China is likely to be unkind, and he may talk about China-Russia relations, the Taiwan Strait and the South China Sea, and even overcapacity.
At present, the signs of the expansion of the conflict between the two sides of the country are intensifying, and the pace of the 2024 presidential election in the United States cannot be stopped, as well as the Korean Peninsula, the Russia-Ukraine conflict, climate cooperation, etc., at least for the Biden administration, it is more active to seek cooperation with China than confrontation at this stage. This kind of "coaxing while fighting" routine is not to see who coaxes well, but to see who hits the pain, only when you are hurt and sober, can you sit down calmly and talk about it. At this time, Blinken should be willing to talk, but whether he is sincere or not, it will be interesting to wait and see.