#Economy & #Stocks Review - US China Trade War Much Deeper Than Public Realizes

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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US China Trade War Much Deeper Than Public Realizes

As the U.S.-China trade war escalates, speculation grows over whether China could use its holdings of U.S. debt as leverage. China holds approximately $760 billion in U.S. Treasuries and, in theory, could sell off these assets to weaken the dollar in retaliation for President Trump’s 145% tariffs on Chinese imports. However, such a move could backfire, as it would also devalue China’s own dollar-denominated assets and strengthen the yuan, making Chinese exports less competitive.

Economists warn that this “nuclear option” could destabilize global markets. While the U.S. Federal Reserve could respond with quantitative easing to stabilize the economy, uncertainty around trade policy is already impacting consumer sentiment and economic outlook. Consumer confidence has dropped sharply amid growing concerns over inflation, personal income, and the broader effects of prolonged trade conflict.

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