Since 2018, the United States has launched a trade war against the mainland, and now the financial and trade war between China and the United States seems to be coming to an end, and the United States is one step closer to the throne of the loser.
Japan, which was deeply affected by the trade war, invested 8 trillion yen in an attempt to save itself, but failed. On June 28 of this year, the yen fell below the 161:1 mark against the dollar, setting a new record for the lowest since December 1986.
Why didn't the United States save it?
The U.S.-China trade war
In 2018, Che Trump suddenly said that he would raise tariffs on imports of gas, hard drives and other parts from the mainland. The mainland also imposed 25 percent tariffs on 545 items of U.S. goods.
A financial and trade war began.
In December 2018, at the G20 summit, the two heads of state met and talked. A "truce" was reached. However, the United States has always been duplicitous, and after less than half a year of truce with us, a new round of financial and trade war has begun.
In May 2019, the United States raised tariffs on $200 billion worth of mainland imports to 25%, and the mainland also increased tariffs on $60 billion worth of US goods if negotiations with the United States could not be reached.
Interestingly, at the G20 summit held in 2019, the United States once again proposed a "truce", but less than two months later, the United States publicly accused us of being a "currency manipulator".
In addition, the United States has also sanctioned some of our technology companies and restricted the mainland's imports of chips and other high-tech products from the United States and other Western countries.
In May, the United States announced that it would increase tariffs on $18 billion worth of mainland goods, and shortly after that, U.S. Treasury Secretary Janet Yellen said she "hopes China will respond in a 'rational way.'"
The behavior of the United States is simply speechless.
Recall that in the later years of the Trump administration, the attitude towards the mainland was erratic, one would raise tariffs on mainland products, and the other would cancel or postpone the measures of "raising tariffs" on mainland products.
Why is there such a change in the United States?
wavering
At present, the main strategy of the United States is the "Indo-Pacific Strategy", and they hope to gain a firm foothold in the Indo-Pacific region, and containing the development of the mainland is a major goal of the entire "Indo-Pacific Strategy".
In the eyes of the United States, we will seriously affect the "Indo-Pacific Strategy" plan of the United States, so the United States has often used various means to suppress us over the years.
But what the United States did not expect was that we would fight back.
The United States has raised tariffs on mainland imports, and the mainland has also raised tariffs on American products with its backhand, and the United States' practice of killing 1,000 enemies and losing 800 of its own losses has only made the US economy nervous.
As far as the United States is concerned, it is not in the interests of the United States to completely tear its face with us, because the mainland still holds trillions of US bonds in its hands, making it the second largest overseas holder of US bonds.
In 2020, the mainland sold 9.3 billion U.S. bonds, which made the United States a little panicked, and a large number of U.S. bonds were sold, which would cause the yield of U.S. Treasury bonds to rise, making the position of the dollar world currency unstable.
Since the end of 2021, the mainland has begun to reduce its holdings of U.S. bonds, and in just one year, the mainland has reduced its holdings of U.S. bonds by $173.2 billion. This is not good news for the United States.
The U.S. economy is already a dangerous building, and no one can say for sure when it will collapse, but what the United States has done has undoubtedly made this dangerous building more and more dangerous and accelerated the speed of its collapse.
At a time when the mainland is constantly reducing its holdings of U.S. bonds, there is a country that has increased its holdings of U.S. bonds and surpassed the mainland to become the No. 1 creditor of the United States
That country is Japan.
In 2019, Japan increased its holdings of U.S. Treasury bonds by $21.9 billion, becoming the largest creditor of the United States.
In a series of "self-destruct" operations by the United States, Japan can be said to be the most affected country.
Objectively speaking, the series of sanctions and suppression measures taken by the United States have only caused some minor effects on the mainland's economy, and on the whole there are no major problems, and the economy is still developing steadily.
Although the United States is also under tremendous economic pressure, the United States will transfer the pressure to the European Union, Japan, South Korea and other countries, so that everyone can share the pressure, and the United States can also be much easier.
But for the close allies of the United States, the economic pressure passed on by the United States can almost crush them, coupled with the Fed's continuous interest rate hikes and its unwillingness to cut interest rates, these countries are almost forced to a "dead end".
In Japan, as of June 28 this year, the yen fell below the 161:1 mark against the dollar, setting a new record.
According to the data, the yen has fallen by more than 10% against the United States since 2024, taking the throne of "the world's worst-performing major currency".
The Bank of Japan is under pressure to raise interest rates if it wants to stabilize the exchange rate, but Japan's domestic economy cannot support the higher interest rates, which puts Japan in a dilemma.
Japan's Central Treasury of Agriculture and Forestry announced that it would sell nearly 10 trillion yen worth of overseas bonds, mainly U.S. Treasury bonds and European government bonds, to stay afloat. The bank's predicament is due to the Fed's reluctance to cut interest rates.
Japan's finance minister said that Japan would intervene in the exchange rate "to a limited extent" and that they would spend as much as they wanted to avoid excessive depreciation of the yen.
In fact, as early as May, there were media reports that the Bank of Japan may have invested 8 trillion yen to intervene in the exchange rate market, although Fumio Kishida did not comment on this matter, but Japan has indeed taken corresponding measures.
However, judging from the current 161:11 exchange rate of the yen against the dollar, there is a high probability that the measures taken by Japan will fail.
So why is the United States reluctant to "rescue" Japan?
Losers born?
Where the U.S. launched a financial and trade war against us, the U.S. probably didn't expect it to fail, especially after they imposed sanctions on mainland technology companies, thinking they had a grip on us.
However, the actual situation is very different from what the United States expected.
The United States has invested a lot of money to squeeze the living space of American enterprises, but it has found that it cannot stop us at all. The moment Huawei broke through U.S. sanctions, the U.S.-China trade war seemed to have an end.
The United States' actions such as raising tariffs on the mainland have increased the economic pressure on American enterprises and caused "turmoil" in the US economy. Coupled with the United States' "two-front war," the already weak US economy is even more overwhelmed.
The Fed's previous interest rate hikes, while briefly preserving the U.S. economy, were particularly unfriendly to America's allies, who were waiting for the Fed to cut interest rates.
On 4 July, the Fed released the minutes of their June monetary policy meeting, arguing that the current situation was not enough for them to cut interest rates.
Last month, Fed officials said they were expected to cut interest rates only once this year. The Fed's interest rate will remain between 5.25% and 5.5%.
In general, the operation of the United States has not only hurt itself, but also its allies, and the United States should wake up as soon as possible.
Resources:
[1] Observer, "After the tariffs were imposed, U.S. Treasury Secretary Janet Yellen actually said that she "hopes China will respond in a rational way"20240515
[2] "The exchange rate of the yen against the US dollar, the lowest record in 37 years! The market continues to sell, and the Japanese Finance Minister: For the sake of the yen, you can spend as much as you want...... 20240628