Home›Global Markets›Trade & Tariffs›Economist warns US sanctions threats against China may…

Economist warns US sanctions threats against China may lack credibility

The analysis argues that US financial fragility, including a precarious bond market, makes it less able to withstand the blowback of broad sanctions than China.

Reported · Written up by our desk · Trade & Tariffs

A Shanghai-based economist says recent US threats to impose sanctions tied to China’s relationship with Iran are unlikely to be credible, arguing the United States has more to lose than China in a serious escalation.

According to SCMP Economy, the economist points to factors including an AI-driven bubble and what he characterizes as the US’s precarious bond market, saying these increase the risk of a shock to the US financial system.

The analysis also contends that even if the US were to move on tools such as cutting major Chinese institutions off SWIFT, dollar-based cross-border messaging alternatives exist, including China’s Cross-border Interbank Payment System, and could accelerate the yuan’s rise.

SCMP Economy further notes that the writer frames the US threats as reflecting a lack of remaining options for a wider conflict, concluding that China, having absorbed prior sanctions pressure without triggering recession, has little incentive to respond aggressively to additional demands.

More like this

Sources