The consequences of the U.S. imposing additional taxes are already evident, and China and Japan may be heavily selling U.S. Treasury bonds, greatly increasing the risk of national default.

After Trump announced a 104% tariff increase on China, many Western financial practitioners claimed on the morning of the 9th that China and Japan were heavily dumping U.S. Treasury bonds in the market, with daily sales possibly exceeding 20 billion dollars. In this way, buyers can purchase bonds at lower prices, while the face value of interest remains unchanged, meaning yields would significantly increase. This is reflected in the market as a sharp rise in U.S. Treasury yields; the 10-year yield rose to 4.5%, and the 30-year yield reached 5%, both breaking through psychological barriers.

If this situation continues, it will be catastrophic for the Trump administration. It is estimated that by 2025, the interest expense on U.S. Treasury bonds will reach 1.2 trillion dollars, higher than military expenditures, equivalent to burning 3.3 billion dollars per day. For every 1% increase in the 10-year yield, annual interest expenses will increase by 360 billion dollars. Moreover, within the next year, the U.S. has 8-9 trillion dollars of debt maturing, requiring higher-interest reissuance to roll over debts. Based on the current selling speed, if Trump cannot find 6.3 billion dollars of承接 funds every day, the risk of U.S. national debt default will greatly increase. In short, the consequences of the U.S. imposing additional taxes are already beginning to show.

Of course, apart from imposing global tariffs, Trump may have also tailored a "承接 plan" for U.S. Treasury bonds. Previously, some U.S. media reported that the U.S. might forcibly convert foreign investors' holdings of U.S. Treasury bonds into zero-interest century bonds. Calculated at a 3% inflation rate, the actual value of these bonds a hundred years later may drop to only 1.04%, which is equivalent to legal default. Perhaps everyone realized, after the global tariff incident, that Trump was crazy enough to take such actions, so they collectively fled at this moment.

Original source: https://www.toutiao.com/article/1828909248251908/

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