The U.S. Treasury Secretary echoed the words of the US envoy to the UN, Nikki Haley, by calling for a fresh round of sanctions against Pyongyang , North Korea. Mnuchin added “if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system.”
Washington has, so far, been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing and the potentially catastrophic consequences for the global economy.
Washington runs a $350 billion annual trade deficit with Beijing. China also holds $1 trillion in US debt, which amounts to 28 percent of US Treasury bills, notes and bonds held by a foreign government.
US lawmakers, however, seemed to be more inclined to exert pressure on Beijing and other countries striking deals with Pyongyang as they demand a “supercharged” response to North Korea’s nuclear tests, including imposing sanctions on companies from China and any other country doing business in North Korea.
The U.S. has often accused China of manipulating their currency. This is one of the main reasons why we do not trade the Chinese currency in our strategies. This situation bears watching.