And in order to stabilize their own currency, the Chinese will take shots at the U.S. dollar. Although the country is still the biggest foreign holder of the U.S. foreign debt, China has slashed it's share by nearly $14 billion, with the country's holdings falling to $1.15 trillion from nearly $1.17 trillion in August, according to the latest data from the Treasury Department. The fall marks the fourth straight month of declines, according to a report by RT. China is followed Japan's lead, as their share of U.S. Treasuries fell to $1.03 trillion, the lowest since October of 2011.
Other nations are divesting from the dollar as well making the U.S.'s currency highly unstable. China's purchase of U.S. has fallen as the U.S. continues to borrow increasingly more money. And with a newly divided Congress, it doesn't look like the deficit will decrease anytime soon and the trade war is likely to
This latest drop in purchases of U.S. debt comes on top of the escalating trade conflict between Beijing and Washington over a trade imbalance, market access, and alleged stealing of U.S. technology secrets by Chinese corporations. So far, the US has imposed tariffs on $200 billion of Chinese goods and Beijing retaliated with tariffs on $60 billion of US goods and stopped buying American crude. But if a deal is not reached, tariffs will rise sharply, to 25% in January.