The US is now truly embarrassed as it has come to the point of imposing tariffs on Chinese products. First, they claimed that the tariff system was malfunctioning, and then temporarily exempted tariffs on related products such as mobile phones and computers. This is because American companies use a large number of Chinese-made semiconductor devices like power supplies, flash DDR+, etc., as well as outsourced products. If these are sanctioned, American companies like Dell and Apple would be almost completely paralyzed.

What is the current situation? If you are a manufacturer of Chinese smartphones, computers, integrated circuits, etc., you can continue to produce and sell globally without being affected by tariffs (because China has a complete industrial chain and can be self-sufficient in raw materials and parts).

If you are an American manufacturer, although you can still sell these products globally (though you may face some equivalent tariffs), raw materials, equipment, etc., will all be subject to tariffs (because all of these need to be purchased from China), so your product costs will be higher.

Firstly, what does China's industrial chain rely on to become the strongest in the world? The answer is its 1.4 billion domestic market. From importing energy, refining various minerals comprehensively, to sending them to various processing factories for further customization, this process consumes a lot of electricity and water resources. Thanks to the unique natural canals and the complementary industrial chains of each province and city, science and technology cities like Yiwu, Shenzhen, and Hangzhou have been formed.

Therefore, when China's foreign trade enterprises are restricted by the US's reciprocal tariffs, major retail giants such as Yonghui, JD.com, and Alibaba collectively stepped in: helping foreign trade enterprises expand their domestic sales channels. This spirit of collectivism is something the US does not have.

In addition, China has many alternative countries to import goods from the US. For example, China National Petroleum Corporation signed an agreement with Saudi Aramco to expand the Yanbu refinery, building a new ethylene unit with an annual capacity of 1.8 million tons. This further consolidates Sino-Saudi energy cooperation. This cooperation directly impacts the US energy export market. Data shows that in 2024, US liquefied natural gas exports to China fell by 32%, while Saudi crude oil exports to China increased by 17%.

At the same time, China bought 40 shipments of soybeans from Brazil to replace US agricultural product imports. In 2024, US farmers' export income to China decreased by $12 billion, forming a "de-Americanization" supply chain restructuring.

Therefore, China has the confidence to stand firm against the US. Otherwise, you cancel everything, or China won't take a step back. Now Trump is more worried about China selling US bonds.

According to data from the US Treasury Department, $6.5 trillion worth of US Treasury bonds will mature in June 2025, accounting for 70% of the total debt due for the year. These debts are mainly five-year bonds issued during Trump's term in 2020. At that time, in response to the impact of the pandemic, the US government borrowed heavily at low interest rates. Now, with the Federal Reserve's aggressive interest rate hikes, US bond yields continue to soar.

Japan has already been unable to withstand the US tariff stick. From the private sector, people are starting to sell US bonds en masse. Japan holds the most US bonds globally, reaching $1 trillion. Japanese banks have been severely hit by the decline in US stocks and must sell US bonds to fill the gap.

Although the Japanese finance minister explicitly assured the US that Japan would not sell US bonds, official statements may not stop private actions. As the largest overseas holder of US Treasury bonds (holding approximately $1.27 trillion), various institutions holding US bonds in Japan are selling them in droves. There are even institutions listing $20 billion worth of US bond sell orders at one o'clock in the morning.

As a transit trade country, a sharp drop in the exchange rate would increase the cost of imported raw materials and lower the export prices, which is akin to cutting off its own flesh. Therefore, Japan must keep the exchange rate stable between 130 and 150. For transit trade countries, extreme fluctuations in exchange rates are very dangerous; stability is key. The Bank of Japan currently has little dollar reserves left and can only rely on selling US bonds to obtain more dollars. In future currency wars, it must safeguard the yen exchange rate.

From the "Mar-a-Lago Agreement" circulating in March, it can be seen that the US is attempting to force countries to replace high-interest US bonds with low-interest ones through extreme pressure, thereby resolving the most dangerous $6.5 trillion maturing crisis out of the total $38 trillion debt snowball. This attempt to "hostage" global creditors into "debt restructuring" has already failed under Trump's tariff stick. Japan's sale of US bonds has sent a signal that even America's closest allies no longer trust the dollar.

This $6.5 trillion worth of US bonds maturing in June is equivalent to 22% of the US GDP. If they cannot be refinanced at low interest rates, the federal government's daily interest expenditure will exceed $1.6 billion. More ironically, to raise funds for refinancing, the US has to raise the debt ceiling, pushing the total US debt close to $40 trillion. This "borrowing new to pay old" death spiral could easily collapse.

As the second-largest holder, China's 759 billion US dollars in US bonds, even if reduced by 10%, would be enough to cause significant tremors in the US financial market.

Trump tried to reconstruct the "American-centric" trading system through tariffs but didn't realize that the global industrial chain had already formed a resilient network of "de-Americanization." After enduring a 46% tariff pressure, Vietnam, Cambodia, and other Southeast Asian countries accelerated their joint efforts with China to build the Lancang-Mekong Economic Belt. These changes reveal a cruel reality: the more the US wields its tariff stick, the more it works in favor of others — China is using this pressure to make a daring leap from being the "world's factory" to becoming the "global hub."

Original source: https://www.toutiao.com/article/7493193328792568330/

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