In my opinion, there is a component to the execution of tariffs applied to Chinese imports that could have a positive outcome, which far outweighs any negative effects on the U.S. economy.
What many may not be aware of is the U.S. is deeply in debt, a lot of which is owed to China. I suggest that instead of simply propping up America’s G.D.P. with the $500 billion windfall coming into the economy as a result of these tariffs, the U.S. needs to start buying back the trillion dollars in U.S. treasuries that the Chinese have been stockpiling for the past three or four decades.
For those pundits who criticize President Trump for enforcing tariffs against China for economic reasons, maybe they would be less critical if they understood that the additional money coming in at China’s expense could be leverage against China to pay some of the U.S. debt owed to them.
I can only hope Treasury Secretary Mnuchin is at least considering this option. The longer these tariffs remain in place, the more likely it is that China will be willing to start exchanging the debt for the economic hardship that is eminent to affect China’s economy.