[throwawaytw5454]

If a trade war happened, it would wound the developing world a great deal more than it would impact the United States.

The US could be self-sufficient in terms of resources and manufacturing with relatively minor policy shifts and subsidization of domestic industries.

China's export-driven, currency-manipulating economic engine pretty much needs the US as a market so it doesn't collapse under its own weight. China already isn't playing ball by allowing American companies to compete within its domestic market, so it's not like that would be any great loss on that front.

Personally, I'd love to stop subsidizing the third world at the expense of American citizens. Developing countries need the US a lot more than the US needs them.

[throwaway251]

"Personally, I'd love to stop subsidizing the third world at the expense of American citizens. Developing countries need the US a lot more than the US needs them."

That's the exact illusion most Americans live on.

"On November 7, 2016, debt held by the public was $14.3 trillion or about 76% of the previous 12 months of GDP.[5][6][7][8] Intragovernmental holdings stood at $5.4 trillion, giving a combined total gross national debt of $19.8 trillion or about 106% of the previous 12 months of GDP.[7] $6.2 trillion or approximately 45% of the debt held by the public was owned by foreign investors, the largest of which were China and Japan at about $1.25 trillion for China and $1.15 trillion for Japan as of May 2016.[9]"

Go figure..

Source: https://en.wikipedia.org/wiki/National_debt_of_the_United_St...

[xenadu02]

Public debt is just a way to account for spending publicly, instead of printing money. The national debt can grow indefinitely so long as the economy continues to grow. (Fun fact: the US Government does make money out of nothing by minting coins. The Treasury creates them and hands them to the Federal Reserve, who increases the US Government accounts by that amount - creating new money out of nothing).

China buys US debt because they are forced to do so. They print Yuan to buy it which depresses the value of their currency. Some of the Chinese leadership is well aware that the balance of trade with the US and Europe must equalize. They've been taking measures to encourage domestic consumption and a transition away from an export-heavy economy. I don't think they're moving quickly enough because they're scared of disrupting the economy - fearing the Communist government (and their power) won't survive.

If China stopped buying US debt they'd have to buy European debt. If they stopped buying both their currency would appreciate and their exports would not be so cheap.

[Retric]

Debt and GDP is only loosely related. Nations only need to service their debt not pay it down in some short time period. Thus, 14.3 trillion in (debt) * (current interest rate - inflation) or around 14.3 trillion * (2.423% - 2.20%) = 28.6 billion per year or ~1/500 GDP aka peanuts.

[throwaway251]

That's assuming there is still growth and inflation - who are going to be the buyers?